Amaya Announces US$167 Million Acquisition of Cadillac Jack

MONTREAL, Sept. 25, 2012 /CNW/ - Amaya Gaming Group Inc. ("Amaya" or the "Company") (TSXV: AYA), an entertainment solutions provider for the regulated gaming industry announced today that it has entered into an arm's length definitive agreement to acquire (the "Acquisition") Cadillac Jack, Inc. ("Cadillac Jack") in a merger transaction on September 25, 2012.  Cadillac Jack is a leading supplier of products and technologies for the global gaming market with gaming machine placements in more than 200 venues in the United States and Mexico.

For the year ended December 31, 2011, the audited consolidated financial statements of Cadillac Jack reported US$78.5 million in total revenues and US$17.8 million in net income.  During that same period Cadillac Jack generated US$35.7 million in adjusted EBITDA1. As at December 31 2011, Cadillac Jack reported total assets of US$72.0 million and total liabilities of US$85.8 million.  For the six month period ended June 30, 2012, the unaudited consolidated financial statements of Cadillac Jack reported US$39.6 million in total revenues and US$3.9 million in net income. During that same period Cadillac Jack generated US$18.4 million in adjusted EBITDA.  As at June 30, 2012, Cadillac Jack reported total assets of US$77.9 million and total liabilities of US$87.6 million.

Amaya will pay approximately US$167.0 million to acquire 100% of the equity of Cadillac Jack and to retire its debt. The transaction will be funded through three separate cash payments.  The first payment will be made upon closing of the Acquisition, and will total approximately US$147.0 million. Amaya will make two additional payments of US$10.0 million each, on the first and second anniversaries of the closing of the Acquisition.  Amaya will finance the payment of the acquisition consideration through a combination of cash-on-hand and a new US$70.0 million to US$100.0 million non-convertible senior secured term loan.

"The acquisition of Cadillac Jack is a pivotal event for Amaya.  We expect that the combined companies will leverage their distribution for game content in the key areas of online, mobile and land based casinos. The Acquisition creates immediate scale for Amaya's operations and greatly enhances growth opportunities for both companies," said David Baazov, Chief Executive Officer of Amaya.

Expected Benefits of the Acquisition

  • Provides for the acquisition of a leading global manufacturer and operator of electronic gaming machines

  • Allows for immediate scale in revenue and adjusted EBITDA

  • Presents a variety of opportunities to leverage each business' product and intellectual property suite across a broader combined platform with greater geographic presence

  • Creates revenue synergies by accelerating Amaya's penetration in the United States and extending Cadillac Jack's offering beyond the United States and Mexico to new markets in Canada and Europe

  • Anticipated by management to be immediately accretive to earnings per share

Cadillac Jack focuses on serving small to medium-sized casinos and bingo halls across the United States and Mexico, including Native American Class II and Class III and commercial locations.

  • Cadillac Jack's gaming machines consist of server-based and stand-alone video reels, multi-level and wide area progressive products and slot management systems, supported by a library of more than 100 titles.  In the United States, Cadillac Jack has a highly diversified Class II presence in 13 jurisdictions.  Cadillac Jack also has a leading presence in Mexico with placements in more than 150 locations.

  • By combining operations of the two companies, Amaya expects that the Acquisition will result in substantial revenue and cost synergies, which should be achieved within the first year following the closing of the Acquisition.

"I want to thank Gene Chayevsky, who has held leadership roles at Cadillac Jack since 2004 and been its CEO since 2008, for his stewardship in establishing one of our industry's emerging leaders," said Mr. Baazov. "The foundation for growth that Gene established at Cadillac Jack made it an ideal complement to Amaya's business."

"I'm proud of our team and our accomplishments over the past several years, which established Cadillac Jack as one of Georgia's and the gaming industry's leading growth companies," said Gene Chayevsky, Chairman, Chief Executive Officer, and controlling shareholder of Cadillac Jack.  "I would like to congratulate Amaya on this important acquisition and thank all of my colleagues at Cadillac Jack for their dedication and results achieved.  I look forward to the completion of the transaction and to pursuing other investment opportunities."

Completion of the transaction is subject to a number of conditions including customary TSX Venture Exchange approvals.

Management

As part of the Acquisition Gene Chayevsky, current Chairman and Chief Executive Officer of Cadillac Jack, will be leaving Cadillac Jack upon completion of the transaction and will assist in the transition process prior to closing.    Mauro Franic, current Chief Operating Officer, and Sigmund Lee, current Chief Technology Officer, will remain in their positions at Cadillac Jack.  David Baazov, Chairman of the Board and Chief Executive Officer of Amaya, will hold those same positions with Cadillac Jack.

Expected Closing Date

The expected closing date of the Acquisition is expected to occur during the fourth quarter of 2012.

Advisors

Greenberg Traurig P.A. served as U.S. counsel and Heenan Blaikie LLP served as Canadian counsel to Amaya in connection with the Acquisition.  McCarthy Tetrault, LLP acted as securities counsel to Amaya.  Wilmer Cutler Pickering Hale and Dorr LLP advised Cadillac Jack and its principal shareholder in connection with the Acquisition.

Macquarie Capital Markets Canada Ltd. acted as financial advisor to Amaya in connection with the Acquisition, and as sole lead arranger and sole book runner in connection with the fully underwritten non-convertible senior debt financing secured by Cadillac Jack's assets, the proceeds of which will be used to partially fund the Acquisition.

Investor Conference Call

Amaya will hold an analyst conference call to discuss the transaction on September 25, 2012 at 1:00 pm EDT. Media and others may access this call on a listen-in basis. Conference call details are as follows:

  • To access the call via live webcast, please visit www.newswire.ca/en/webcast/detail/1040619/1130339.  The webcast will be archived for one month.

  • To access the call via telephone, please dial (888) 231-8191 toll-free or +1(647) 427-7450 internationally. Please allow 10 minutes to be connected to the conference call.

  • A telephone replay of the call will be available beginning approximately one hour after the call on (855) 859-2056 toll free or +1(416) 849-0833, and passcode 34577830, until midnight EDT October 2, 2012.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

About Amaya

Founded in 2004, Amaya Gaming Group Inc. is a technology based gaming provider for the regulated gaming industry. An expansive global organization, present in North America, Latin America, Europe, Africa and Asia, Amaya is an innovator in the gaming world.

Headquartered in Montreal, Canada, Amaya provides a host of services and solutions that range from: online and mobile gaming casino games and platforms, traditional and mobile lotteries, networked electronic gaming systems, hospitality in-room entertainment systems, management systems, content suites, advisory and management services, and integrity monitoring and auditing systems for the regulated gaming markets.  For more information please visit www.amayagaming.com or www.amayaonline.com.

About Cadillac Jack, Inc.

Cadillac Jack is a leading supplier of products and technology for the global gaming market. Cadillac Jack provides games and systems to the Class II, Class III and VLT markets in the US, the Mexican gaming market, and other select international jurisdictions.  The company designs, manufactures, and markets a comprehensive range of products that include server-based and stand-alone video reel slots, wide area and multi-level progressives, video lottery terminals, and slot management systems. In addition to its North America headquarters in the metro Atlanta area (Duluth, GA), Cadillac Jack maintains international sales and service locations throughout Mexico. More information may be found at www.cadillacjack.com.

Disclaimer

This press release contains forward looking statements with respect to the Company, including the expected benefits to Amaya of completing the Acquisition. Although the Company believes that the expectations reflected in such forward looking statements are reasonable, such statements involve risks and uncertainties and are based on information currently available to the Company. Actual results may differ materially from those expressed or implied by such forward looking statements. Factors that could cause actual results or events to differ materially from current expectations, among other things, include risks related to market factors, retention of key officers and contracts of Cadillac Jack, to achieve the expected benefits of the Acquisition, and other factors discussed in materials filed with applicable securities regulatory authorities from time to time including matters discussed under "Risk Factors" in the Company's Company's Annual Information Form for the year ended December 31, 2011. These forward-looking statements are made as of the date hereof, and the Company assumes no obligation to update or revise them to reflect new events or circumstances.

1 Adjusted EBITDA as defined by the Corporation means earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, stock-based compensation, restructuring and other non-recurring costs, non-controlling interests, and Loss (Gain) on currency conversion . Adjusted EBITDA is a non-IFRS measure.


SOURCE: AMAYA GAMING GROUP INC.

For further information:

Mr. David Baazov
President and Chief Executive Officer
Amaya Gaming Group Inc.
North America: 1-866-744-3122
Worldwide: 1-514-744-3122
http://www.amayagaming.com

Mauro Franic
Chief Operating Officer
Cadillac Jack, Inc
1-404-861-6557
mauro.franic@cadillacjack.com
http://www.cadillacjack.com

Jeff Codispodi
The Equicom Group
416-815-0700 ext. 261
jcodispodi@tmxequicom.com

Profil de l'entreprise

AMAYA GAMING GROUP INC.

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