Inspired Entertainment, Inc. announced that it has entered into a definitive agreement to acquire the Gaming Technology Group (NTG) of Novomatic UK Ltd., a division of Austria’s Novomatic Group, for the equivalent of US$120.0 million in cash.
Inspired is a leading supplier of Category B2/B3 gaming terminals in the U.K., and the is a leading supplier of Category B3, C and D gaming terminals to pubs, arcades, motorway service areas and holiday resorts in the U.K. Following the transaction, Inspired would be positioned to supply an extensive range of products and services across the U.K. and Europe, and beyond.
Upon closing the acquisition, Inspired would manage more than 75,000 gaming machines in the U.K. and Europe.
“The potential acquisition of NTG is transformational for Inspired, enabling us to dramatically increase the size, scale and scope of our business by combining our highly complementary, but largely non-overlapping, businesses,” said Lorne Weil, executive chairman of Inspired Entertainment. “We expect to leverage our superior game content, technology, operational capabilities and respective footprints to augment the existing growth trends for our enterprise.”
NTG is comprised of the following six companies:
- Gamestec Leisure – Primarily serving the U.K. pub sector through the placement of gaming machines on a managed service basis and delivering service support to the bingo and self service betting terminals sectors.
- Playnation Limited – Serving the U.K. holiday and leisure industry, including holiday parks, motorway service stations, bowling alleys, airports and independent holiday resorts through revenue share arrangements with operators.
- Astra Games Limited – Gaming machine manufacturer, selling Category B, C and D gaming machines to pubs, adult gaming centers, and holiday resorts.
- Bell-Fruit Group Limited – Primarily selling Category C machines, both analog and digital, and exporting machines to key European geographies.
- Harlequin Gaming Limited – Game development studio for Astra and Bell-Fruit.
- Innov8 Gaming Limited – Gaming machine developer supplying Category B3 and C gaming machines within the NTG and to external customers.
“Inspired and NTG currently operate in different segments, but have much in common in terms of providing resources for our customers and their consumers,” Weil said. “This combination would provide additional resources for our core businesses and combine the great content and machine portfolio from each. We expect to be able to deliver meaningful value to our shareholders as the acquisition is integrated.”
Inspired expects to achieve $12.3 million to $13.3 million of synergies through shared costs and increased scale. Inspired also expects to be able to make efficient use of shared manufacturing, engineering, software development, field maintenance and customer service to drive growth and cost savings after the transaction closes.
Inspired further expects to reduce capital deployed in the pub gaming sector following the closing of the transaction, as the sector continues its ongoing digital transformation.
Inspired plans to draw on the core strengths of Inspired and NTG to broaden offerings, bring differentiated gaming products to new sectors and geographies, accelerate key growth initiatives and offer enhanced capabilities, systems, field service and content. The addition of NTG is expected to help diversify Inspired’s U.K. business and expand into contiguous customer segments with very little overlap of existing customers. Inspired’s position and expertise in server-based gaming is expected to accelerate NTG’s development initiatives to transition the pub gaming sector from analog to digital gaming machines.
Inspired and NTG are both known for their product innovation and creative content. Together, the companies expect to offer an expansive combined game and machine portfolio to customers. Inspired and NTG are also well positioned to capitalize on further converting NTG’s game library for online deployment.