Industry News
Inspired Announces Agreement To Acquire Novomatic UK’s Gaming Technology Group
Anticipated to Diversify and Broaden Scale and Scope of Inspired’s Footprint and Product Offering
Inspired Entertainment, Inc. announced that it has entered into a definitive agreement to acquire the Gaming Technology Group (“NTG”) of Novomatic UK Ltd. (“Novomatic UK”), a division of NOVOMATIC GROUP, a leading international supplier of gaming equipment and solutions, for the EUR equivalent of US$120.0 million in cash.
Inspired is a leading supplier of Category B2/B3 gaming terminals in the UK, and NTG is a leading supplier of Category B3, C and D gaming terminals to pubs, arcades, motorway service areas and holiday resorts in the UK. Following the transaction, Inspired would be positioned to supply an extensive range of products and services across the UK and Europe, and beyond. Upon closing the acquisition, Inspired would manage more than 75,000 gaming machines in the UK 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 UK 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 UK 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.
Mr. Weil continued, “Inspired and NTG currently operate in different segments but have much in common in terms of providing resources for our customers and their consumers. 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.”
Improved Operating Efficiencies
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.
Complementary Businesses Leveraging Core Competencies
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 UK 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.
Transaction Terms and Execution
Inspired has agreed to acquire NTG for the EUR equivalent of US$120 million, subject to certain customary adjustments. This consideration represents a multiple of approximately 5.5x NTG’s pre-synergy Adjusted EBITDA of £17.1 million, or $21.7 million[2], for the 12-month period ended December 31, 2018, and 3.5x after adjusting for the mid-point of estimated run-rate annual synergies of £9.6 million to £10.6 million, or $12.3 million to $13.3 million, as if they were achieved January 1, 2018.
The acquisition, which is subject to the approvals of regulatory authorities and other customary closing conditions, is expected to close during the third quarter of 2019. In conjunction with the proposed transaction, Inspired is expected to refinance its existing indebtedness with a new £220 million GBP-equivalent term loan and £20 million revolving credit facility. Inspired has obtained committed financing for the transaction, and the transaction is not subject to a financing contingency. The committed financing is expected to result in a reduction in cost of debt capital.
“The proposed financing is at a lower interest rate than our existing debt and is a major step in improving Inspired’s capital structure,” said Stewart Baker, Executive Vice President and Chief Financial Officer of Inspired. “Pro forma for the acquisition, adjusting for the mid-point of estimated run-rate annual synergies, the proposed financing implies net leverage of 3.0x[3]. It will position us with a stronger balance sheet and extended maturities, while also reducing our cost of capital which we believe will allow us to have more flexibility to capitalize on meaningful opportunities to grow our business.”
Casino Operations
The casino assets of Astra Games Limited are not included in the potential transaction. At or prior to the closing of the Acquisition, Astra will transfer to Novomatic UK Gaming UK Limited, a wholly-owned subsidiary of NOVOMATIC GROUP, assets to the extent related to its casino operations.
Financial and Legal Advisory
Nomura served as financial advisor to Inspired. Sidley Austin LLP and Addleshaw Goddard LLP served as legal advisors to Inspired. Nomura and Macquarie Capital have provided financing commitments to support the transaction.
About Inspired Entertainment, Inc.:
Inspired is a global games technology company, supplying Virtual Sports, Mobile Gaming and Server Based Gaming systems with associated terminals and digital content to regulated lottery, betting and gaming operators around the world. Inspired currently operates approximately 35,000 digital gaming terminals and supplies its Virtual Sports products through more than 40,000 retail channels and over 100 websites, in approximately 35 gaming jurisdictions worldwide. Inspired employs more than 650 employees in the UK and elsewhere, developing and operating digital games and networks.
SOURCE Inspired Entertainment, Inc.
Industry News
Maximising Your Cross-Market Appeal
With Bitblox introducing an entirely new breed of crypto-based price prediction games to the iGaming industry, we talked to CEO, Brandt Page, to discover how combining elements of both chance and skill with lightning-fast betting rounds has helped improve their cross-market appeal.
When Bitblox was first established, our core concept was relatively simple; we didn’t just want to provide players with a new twist on an existing format like slots or casino games, but instead sought to create an entirely new vertical that combined elements of chance and elements of skill.
One of the main drivers behind this decision was the fact that we wanted our releases to appeal to as broad an audience as possible – and I think from the figures we’ve seen so far, we’ve already had some notable success on that front in terms of the players that are engaging with our games.
Funnily enough, I was recently talking to the Head of Marketing from one of the operators that we work with and they told me they were struggling to place our games optimally. Initially, they’d put them in with crash and instant win content, but they soon discovered a lot of their in-game traffic was coming from sports bettors. A move to the sports betting tab followed, but the exact same-thing happened with casino players, leading to the games eventually winding up on the front page.
As this was going on, our games were continuing to post solid numbers with the customers who bet on both sports and casino – and all of this engagement was coming without there being any additional promotion from us or the operator. So why was it that our games were performing so well across these different player segments? I believe there are a number of contributing factors.
First and foremost, having this hybrid model of games of chance and games of skill that I’ve already mentioned has placed us in a fairly unique position within the iGaming industry. On the one hand, the simple premise of our Bitcoin-based titles – coupled with their attractive designs and intuitive UI – makes them highly accessible to casino players who are just looking to have fun.
On the other, the fact that Bitblox games aren’t based on RNG and are instead pinned to the real-time movements of the Bitcoin market certainly resonates with a sports betting audience. As they have the ability to follow the charts and use this information to inform their decisions, they definitely feel they have more control over the outcome than if they were playing a traditional slot.
Another key aspect of our cross-market appeal is the fast-paced nature of all Bitblox releases. With casino players being accustomed to the quick wins and instant gratification of slots and crash games and sports bettors also showing a growing preference for in-play wagering, we’ve ensured each game round is resolved quickly and that there are multiple opportunities for betting.
When we first launched Up or Down?, which features one-minute betting rounds, we soon learned that even this timeframe is too long for some players. This resulted in us developing Up or Down? Turbo – a game which kept the same mechanics as its predecessor but reduced the betting window to 20 seconds – and this has gone on to become one of our most successful titles.
Keeping all this in mind, one of the things I’m most excited about is the upcoming release of our latest game, 3 in a Row, as I think this is a title that really ties everything I’ve talked about so far together. Designed to look like a slot machine, 3 in a Row challenges players to correctly predict how the Bitcoin price will move over three separate 20-second windows for even bigger payouts.
Intended to appeal to casual users and serious sports bettors alike, players can elect to either spin the reels for fun and select a random price sequence or use the bet builder feature to put together their own custom prediction. With the latter essentially functioning like an accumulator bet, players can select up to three possible combinations – i.e. Up/Up/Up, Up/Up/Down etc – and only one result needs to land for them to win, ensuring they stay engaged until the final seconds.
I believe that 3 in a Row can help build on the strong foundations we’ve laid down with casino and sports bettors and provide operators with another popular option that offers significant cross-market appeal. Based on what we’ve seen from previous Bitblox releases, the audience for titles that combine elements of chance and elements of skill is definitely out there – and I’m looking forward to our unique brand of crypto-based games being enjoyed by even more players in future.
Industry News
Gaming Corps to launch with lotteries in the USA via EQL games deal
In-demand content provider extends reach into largest iGaming market in the world with its full suite of games made available via iLottery aggregation platform
Gaming Corps, a publicly-listed game studio based in Sweden renowned for creating industry-leading games, has made its debut in the US market through a breakthrough agreement with leading lottery provider, EQL Games.
The distribution agreement will see Gaming Corps’ full suite of games made available to EQL Games’ powerful iLottery Aggregation Platform, developed to provide lottery operators across America with direct access to a portfolio of proprietary and third-party games.
Following the integration, EQL Games’ lottery operator partners will be offered proven Slots, Table Games, Multiplier Games, Mine Games and Plinko Games, as well as titles under Gaming Corps’ innovative and trademarked Smash4Cash™ series.
The deal and integration come at a time of growing demand among online lottery operators in the US for non-traditional content, a format that Gaming Corps has excelled in, especially with its Smash4Cash™ games, which have been a hit with players in global markets.
EQL’s aggregation platform has been developed to allow online lottery operators to quickly and easily access content from multiple game studios simultaneously through one integration and one commercial agreement.
Its iLottery Aggregation platform simplifies the process of adding new games to an online lottery brand across regulated states. In addition to the third-party content provided via its aggregator platform, EQL Games has a portfolio of in-house titles.
This includes games produced under licence with Team USA which were rolled out by several state lotteries for the Olympic and Paralympic Games in Paris this year, with new titles being planned ahead of the Winter Games in Milan (2026) and the Olympic and Paralympic Games in Los Angeles (2028).
Juha Kauppinen, CEO of Gaming Corps, said: “The USA has always been somewhat of the holy grail for game developers like us, which has been further emphasised as markets in several states have become regulated. The potential in the American market is enormous, and the impact for us is a bit difficult to assess, but we have great hopes for the collaboration with EQL Games, which has an impressive platform towards U.S. lotteries.
“We believe it will have a significantly positive impact on our revenues. I would like to personally take the opportunity to thank EQL Games and Brad Cummings for the collaboration, and we are now working hard to complete the integration so that all our games will be offered to EQL’s customers via their platform.”
Brad Cummings, CEO of EQL Games, added: “Including Gaming Corps as a supplier to the EQL Games iLottery Aggregator is an exciting step forward in our mission to offer unique, high-quality content to state lotteries. Gaming Corps’ expertise in iGaming, along with their unique game portfolio, fits perfectly with our vision of enhancing the lottery experience through dynamic and engaging content.”
Industry News
Public Voting Starts for Ortak x B.F.T.H. Arena Awards 3.0
The highly anticipated Ortak x B.F.T.H. Arena Awards 3.0 has officially entered the public voting phase as submissions are closed.
More than 70 game providers have turned in over 160 submissions, including Tom Horn Gaming, Pragmatic Play and RubyPlay. Public voting involves enthusiasts casting their votes to pick the winner of the Game of Public Choice category.
The Public voting phase ends on December 1st 23:59 GMT+4.
Concurrent to public voting, the first phase of private voting also starts during which all participants who have submitted entries get the chance to vote for one favourite in each category. An international auditing company oversees this phase to eliminate duplicate votes and self-votes. This phase ends on November 19, 23:59 GMT+4.
The second phase of private voting will also take place with a jury of industry experts making their decisions based on the shortlist picked by participants during the first phase.
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