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Thesis
The acquisition of Aspire (ASPGF) is accretive to NPI's Canadian operations as it strengthens their value proposition and positions NPI in a prime spot to be the sole supplier of the entire iGaming ecosystem
NeoGames: Acquisition Of Aspire Is Synergistic In Canada And Drives Upside
Summary
- The acquisition of Aspire is synergistic for NPI’s Canadian operations as it positions NPI in a prime spot to be the sole supplier of the entire iGaming ecosystem in Canada.
- NeoGames is paying a bargain price for Aspire, an overlooked iGaming provider with a masking effect.
- Acquisition of Aspire implies a pro forma combined EBITDA (net of discontinued operations) of $60m, valuing NGMS at 11.8x Price/Pro forma EBITDA on a diluted basis.
Looking for asymmetrical investments. Quite interested in stocks with a core/legacy business alongside a smaller 'hidden gem' segment with large upside potential. Focus on downside protection rather than trying to maximize upside.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of NGMS either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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