COQUITLAM, BC and TORONTO, Dec. 19, 2017 /CNW/ - Great Canadian Gaming Corporation (TSX:GC) ("Great Canadian") and Clairvest Group Inc. (TSX:CVG) ("Clairvest") announce today that they have been selected as the successful proponent by the Ontario Lottery and Gaming Corporation ("OLG") to operate certain gaming facilities in the West Greater Toronto Area (the "West GTA Bundle").
The West GTA Bundle is comprised of OLG Casino Brantford, OLG Slots at Mohawk Racetrack, OLG Slots at Flamboro Downs and OLG Slots at Grand River Raceway. These facilities have a combined total of over 2,500 slot machines, approximately 60 table games, employ more than 1,400 staff, and generated approximately $450 million in gross gaming revenue in fiscal 2017.
Great Canadian and Clairvest will invest through a newly formed partnership, Ontario Gaming West GTA Limited Partnership (the "Partnership"), with Great Canadian owning 55 per cent and Clairvest owning 45 per cent. Great Canadian will develop and operate the gaming facilities within the West GTA Bundle on behalf of the Partnership.
As a result of this award, the Partnership will acquire all the gaming assets in the West GTA Bundle and will enter into leases for each of the facilities. It will have the exclusive right to operate these assets for a minimum period of 20 years, in accordance with the requirements of a Casino Operating and Services Agreement. The closing will be completed under the terms of a Transition and Asset Purchase Agreement entered into with OLG.
With years of gaming, racing, hospitality, and development expertise, the Partnership will provide strategic vision and operational modernization that will add extensive non-gaming amenities and expanded gaming offerings to ensure properties in the West GTA Bundle deliver a premier gaming and entertainment experience. The Partnership intends on a significant capital investment in each of the four properties to expand and reposition them that at full build out will create up to 1650 new jobs in gaming, entertainment, and hospitality, while also ensuring each property appeals to a wide spectrum of the marketplace.
The Partnership envisions dramatic enhancements and additions at Mohawk, Flamboro Downs, and Grand River that will create a seamless and integrated experience for the guest for racing, gaming and hospitality, while undertaking a significant top-to-bottom renovation of the Brantford facility.
With years of experience in horse racing in Ontario and other jurisdictions, the Partnership looks forward to collaborating with racing industry stakeholders to work toward the ongoing sustainability of horse racing in the West GTA marketplace. The Partnership also recognizes the significance of these properties in their local communities, and appreciates the importance of engaging early with local community leaders, stakeholder groups, and First Nations.
"Being awarded the West GTA Bundle is a true milestone for Great Canadian and the Partnership. We thank OLG for their confidence in our company and for providing us the opportunity to showcase and apply our gaming, racing, hospitality and development expertise to the selected properties," said Rod N. Baker, Great Canadian's President and CEO. "As a Canadian company that has a long history of responsibly and successfully operating gaming and racing facilities across Canada, we are excited to undertake what we feel will be a dramatic transformation of the entertainment experience at these four properties, for the teams that work there, and the communities they reside in."
Baker continued, "With our longstanding role in horse racing, we appreciate the significance and importance of the harness racing industry provincially, but more particularly, across the West GTA region. We're eager not only to embark upon our exciting development plans for the four properties, but also for the role we feel we can play in working with track operators, racing stakeholders, OLG, the provincial government and other interested parties in sustaining the industry and growing the number of jobs the industry supports."
"We are thrilled that OLG has selected the Partnership as the service provider for the West GTA Bundle. Together with Great Canadian, we are confident in our ability to deliver a unique and spectacular gaming and entertainment experience at the four properties within the bundle," said Jeff Parr, Co-Chief Executive Officer and Managing Director of Clairvest Group Inc.
The closing date for the acquisition of the assets and assumption of certain liabilities from OLG, including the signing of a Casino Operating and Services Agreement with OLG, is expected to be in spring 2018, allowing for a seamless operational transition. Closing is subject to regulatory approvals and other customary conditions.
About Great Canadian Gaming Corporation: Founded in 1982, Great Canadian Gaming Corporation is a BC based company that operates 22 gaming, entertainment and hospitality facilities in British Columbia, Ontario, New Brunswick, Nova Scotia, and Washington State. Fundamental to the company's culture is its commitment to social responsibility. "PROUD of our people, our business, our community" is Great Canadian's brand that unifies the company's community, volunteering and social responsibility efforts. Under the PROUD program, Great Canadian annually invests over $2.5 million in our communities, and in 2016, over 1,500 charitable organizations were supported by Great Canadian. In each Canadian gaming jurisdiction, a significant portion of gross gaming revenue from gaming facilities is retained by our crown partners on behalf of their provincial government for the purpose of supporting programs like healthcare, education and social services.
About Clairvest Group Inc.: Clairvest Group Inc. is a private equity investor which invests its own capital, and that of third parties through the Clairvest Equity Partners ("CEP") limited partnerships, in businesses that have the potential to generate superior returns. In addition to providing financing, Clairvest contributes strategic expertise and execution ability to support the growth and development of its investee partners. Clairvest realizes value through investment returns and the eventual disposition of its investments.
This press release contains certain "forward-looking information" or statements within the meaning of applicable securities legislation. Forward-looking information is based on the Company's current expectations, estimates, projections and assumptions that were made by the Company in light of historical trends and other factors. Forward-looking statements are frequently but not always identified by words such as "expects", "anticipates", "believes", "intends", "estimates", "potential", "targeted", "planned", "possible" or similar expressions or statements that events, conditions or results "will", "may", "could" or "should" occur or be achieved. All information or statements, other than statements of historical fact, are forward-looking information including statements that address expectations, estimates or projections about the future, the Company's strategy for growth and objectives (including participation in Ontario's gaming modernization program and possible expansion of gaming in British Columbia), expected future expenditures, costs, operating and financial results, expected impact of future commitments, the future ability of the Company to operate the Georgian Downs and Flamboro Downs facilities beyond the terms of the signed Ontario Lease Agreements and Ontario Racing Agreements, the impact of conditions imposed on certain VIP players in British Columbia, the impact of unionization activities, the Company's position on its claim against the British Columbia Lottery Corporation ("BCLC") with respect to the collection of marketing contributions, the Company's beliefs about the outcome of its notices of objection challenging the Canada Revenue Agency's reassessments and its tax position on its facility development commission prevailing, the terms and expected benefits of the normal course issuer bid, and expectations and implications of changes in legislation and government policies. Such forward-looking information is not a guarantee of future performance and may involve a number of risks and uncertainties.
Although forward-looking information is based on information and assumptions that the Company believes are current, reasonable and complete, they are subject to unknown risks, uncertainties, and a number of factors that could cause actual results to vary materially from those expressed or implied by such forward-looking information. Such factors may include, but are not limited to: terms of operational services agreements with lottery corporations; changes to gaming laws that may impact the operational services agreements, pending, proposed or unanticipated regulatory or policy changes (including those that impact VIP play); the outcome of modernization of gaming in Ontario; the Company's ability to obtain and renew required business licenses, leases, and operational services agreements; unanticipated fines, sanctions and suspensions imposed on the Company by its regulators; impact of global liquidity and credit availability; actual and possible reassessments of the Company's prior tax filings by tax authorities; the results of the Company's notices of objection and subsequent appeals challenging reassessments received by the Canada Revenue Agency; the Company's tax position on its facility development commission prevailing; the results of the Company's litigation with BCLC; adverse tourism trends and further decreases in levels of travel, leisure and consumer spending; competition from established competitors and new entrants in the gaming business; dependence on key personnel; the timing and results of collective bargaining negotiations; adverse changes in the Company's labour relations; the Company's ability to manage its capital projects and its expanding operations; the risk that systems, procedures and controls may not be adequate to meet regulatory requirements or to support current and expanding operations; potential undisclosed liabilities and capital expenditures associated with acquisitions; negative connotations linked to the gaming industry; First Nations rights with respect to some land on which we conduct our operations; future or current legal proceedings; construction disruptions; financial covenants associated with credit facilities and long-term debt; credit, liquidity and market risks associated with our financial instruments; interest and exchange rate fluctuations; demand for new products and services; fluctuations in operating results; economic uncertainty and financial market volatility; technology dependence; and privacy breaches or data theft. The Company cautions that this list of factors is not exhaustive. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. These factors and other risks and uncertainties are discussed in the Company's continuous disclosure documents filed with the Canadian securities regulatory authorities from time to time, including in the "Risk Factors" section of the Company's Annual Information Form for fiscal 2016, and as identified in the Company's disclosure record on SEDAR at www.sedar.com.
The Company believes that the expectations reflected in forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct. Readers are cautioned not to place undue reliance on the forward-looking information. The forward-looking information contained herein is made as of the date hereof, is subject to change after such date, and is expressly qualified in its entirety by cautionary statements in this press release. Forward-looking information is provided for the purpose of providing information about management's current expectations and plans and allowing investors and others to get a better understanding of the Company's operating environment. The Company undertakes no obligation to publicly revise forward-looking information to reflect subsequent events or circumstances except as required by law.
The Company has included non-International Financial Reporting Standards ("non-IFRS") measures in this press release. Adjusted EBITDA, as defined by the Company, means earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, share-based compensation, impairment reversal of long-lived assets, business acquisition, restructuring and other, and foreign exchange (gain) loss and other. Adjusted EBITDA is derived from the condensed interim consolidated statements of earnings and other comprehensive loss, and can be computed as revenues plus share of profit of equity investment less human resources expenses, and property, marketing and administration expenses. The Company believes Adjusted EBITDA is a useful measure because it provides information to management about the operating and financial performance of the Company and its ability to generate operating cash flow to fund future working capital needs, service outstanding debt, and fund future capital expenditures. Adjusted EBITDA is also used by investors and analysts for the purpose of valuing the Company. Adjusted shareholders' net earnings, as defined by the Company, means shareholders' net earnings plus or minus items of note that management may reasonably quantify and that it believes will provide the reader with a better understanding of the Company's underlying business performance. Items of note may vary from time to time and in this press release include pre-opening costs, restructuring severance costs, impairment reversal of long-lived assets, FDC revenues previously deferred at Casino Nanaimo, other and the related income taxes thereon.
Readers are cautioned that these non-IFRS definitions are not recognized measures under International Financial Reporting Standards ("IFRS"), do not have standardized meanings prescribed by IFRS, and should not be construed to be alternatives to net earnings determined in accordance with IFRS or as indicators of performance or liquidity or cash flows. The Company's method of calculating these measures may differ from methods used by other entities and accordingly our measures may not be comparable to similarly titled measures used by other entities or in other jurisdictions. The Company uses these measures because it believes they provide useful information to both management and investors with respect to the operating and financial performance of the Company.
SOURCE Great Canadian Gaming Corporation
For further information: Media Contact: Sonja Mandic, Director Media Relations and Social Responsibility, Great Canadian Gaming Corporation, Tel: 604.889.7114, Email: [email protected]; Media Contact: Maria Klyuev, Director, Investor Relations and Marketing, Clairvest Group Inc., Tel: 416.925.9270, Fax: 416.925.5753, www.clairvest.com