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
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
"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.
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
Expected Closing Date
The expected closing date of the Acquisition is expected to occur during
the fourth quarter of 2012.
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
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.
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.
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
Chief Operating Officer
Cadillac Jack, Inc
The Equicom Group
416-815-0700 ext. 261