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LAS VEGAS, June 25, 2015 /CNW/ - NYX Gaming Group Limited ("NYX" or the "Company") (TSXV: NYX) today announced that it has entered into an agreement with a syndicate of underwriters, led by Canaccord Genuity Corp. (collectively, the "Underwriters"), pursuant to which the Underwriters have agreed to purchase on a "bought deal" basis (the "Offering") $60.1 million of equity subscription receipts ("Equity Subscription Receipts") and $35.0 million of debenture unit subscription receipts ("Debenture Unit Subscription Receipts", and together with the Equity Subscription Receipts, the "Subscription Receipts").
The net proceeds from the Offering will be used by NYX to fund its previously announced acquisition (the "Acquisition") of all the issued and outstanding shares of Amaya (Alberta) Inc. (formerly Chartwell Technology Inc.) ("Chartwell") and Cryptologic Limited ("Cryptologic") from Amaya Inc. ("Amaya"), and for general corporate purposes. For further details on the Acquisition, see NYX's press release dated April 9, 2015.
The Company has granted to the Underwriters an over-allotment option to cover any over-allotments and for market stabilization purposes (the "Over-Allotment Option"), which will allow the Underwriters to purchase either: (i) additional Equity Subscription Receipts and/or Debenture Unit Subscription Receipts from the Company in the event the closing of the Over-Allotment Option occurs prior to the Escrow Release Date (as defined below), or (ii) additional Shares and/or Debenture Units (as defined below) in the event the closing of the Over-Allotment Option occurs subsequent to the Escrow Release Date, in each case in an amount equal to up to 15% of the number of such securities sold pursuant to the Offering (for greater certainty, excluding the Debenture Unit Subscription Receipts to be issued under the concurrent US Private Placement (as defined below)). The Over-Allotment Option is exercisable in whole or in part, at the sole discretion of the Underwriters, at any time up to the earlier of 30 days after the closing date of the Offering and the Termination Date (as defined below).
The Subscription Receipts will be offered by way of a short form prospectus to be filed in all provinces and territories of Canada. The Offering is expected to close on or about July 16, 2015, and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange. The closing of the Acquisition is expected to occur by July 31, 2015.
Equity Subscription Receipts
An aggregate of 13.5 million Equity Subscription Receipts will be sold at a price of $4.45 per Equity Subscription Receipt for gross proceeds of approximately $60.1 million. Each Equity Subscription Receipt will be automatically exercised, without payment of additional consideration or further action by the holder, for one ordinary share of NYX (a "Share") on the Escrow Release Date, which is expected to occur immediately prior to the closing of the Acquisition.
Debenture Unit Subscription Receipts
An aggregate of 35,000 Debenture Unit Subscription Receipts will be sold at a price of $1,000 per Debenture Unit Subscription Receipt for gross proceeds of $35.0 million. Each Debenture Unit Subscription Receipt will be automatically exercised, without payment of additional consideration or further action by the holder, for one debenture unit of NYX (a "Debenture Unit"), comprised of one $1,000 debenture (a "Debenture") and 70 ordinary share purchase warrants (the "Warrants") of NYX on the Escrow Release Date.
The Debentures will be senior secured debt obligations of the Company and will rank ahead of all other senior, secured or unsecured indebtedness of NYX. The Debentures will have an interest rate of 9.00% per annum payable semi-annually in arrears on the last day of June and December in each year commencing December 31, 2015. The Debentures will have a maturity of June 30, 2020. The Debentures have certain redemption features as will be described more fully in the short form prospectus and Debenture indenture to be filed by NYX in connection with the Offering.
Each Warrant will entitle the holder thereof to acquire one Share at an exercise price of $5.00 per Share (the "Exercise Price") for a period of three years following the closing of the Offering.
Subscription Receipt Agreement
The Subscription Receipts will be issued pursuant to a subscription receipt agreement (the "Subscription Receipt Agreement") to be entered into among the Company, the subscription receipt agent (the "Subscription Receipt Agent") and Canaccord Genuity Corp. on the closing of the Offering. Pursuant to the Subscription Receipt Agreement, the proceeds of the Offering, net of 50% of the underwriters' fee and certain other amounts will be held in escrow pending the Escrow Release Date. If the Escrow Release Date does not occur prior to 5:00 p.m. (Toronto time) on August 31, 2015, or, if prior to such time, the Company advises the Subscription Receipt Agent and Canaccord Genuity Corp., on behalf of the Underwriters, that the Acquisition will not be completed (in either case, a termination event, and the date upon which such event occurs, the "Termination Date"), then within five business days following the Termination Date holders of the Subscription Receipts will receive the full purchase price of their Subscription Receipts purchased, together with their pro rata portion of interest or other income earned or deemed to be earned thereon, net of any applicable withholding taxes.
Escrow Release Conditions
The satisfaction or waiver of all conditions precedent to the Acquisition in accordance with the terms of the share purchase agreement dated April 9, 2015 between the Company and Amaya, as amended (the April 9, 2015 share purchase agreement, together with the proposed amendment discussed below under "Share Purchase Agreement Amendment" collectively referred to herein as, the "Share Purchase Agreement"), without amendment or waiver materially adverse to the Company, but for the payment of the purchase price and other amounts required under the Share Purchase Agreement to be satisfied in part by the release of the escrowed funds from the Offering and the putting in place of the security pursuant to the terms of the Debentures (collectively, the "Escrow Release Conditions"). Upon such Escrow Release Conditions being met, the Company will deliver an escrow release notice to the Subscription Receipt Agent and Canaccord Genuity Corp., on behalf of the Underwriters, seeking the release of the escrowed funds pursuant to the terms of the Subscription Receipt Agreement (such date being the "Escrow Release Date").
Amaya Exchangeable Preferred Shares
As partial consideration for the Acquisition, NYX will cause its subsidiary to issue to Amaya $40.0 million exchangeable preferred shares (the "Preferred Shares"). The Preferred Shares will (i) be issued on closing of the Acquisition and will rank in priority to all ordinary shares and any other preferred shares of NYX's subsidiary outstanding on closing of the Acquisition in the event of winding-up, dissolution or liquidation of NYX's subsidiary; (ii) be redeemable for cash at any time at NYX's subsidiary's option, at a price equal to the Initial Liquidation Preference (as defined below) multiplied by an adjustment factor calculated by dividing the then current Exchange Ratio (as defined below) by the Initial Exchange Ratio (as defined below) (iii) be issuable in denominations of $1,000 per Preferred Share and will have an aggregate initial liquidation preference of $40 million (the "Initial Liquidation Preference"); (iv) not be entitled to receive any dividends; (v) not be transferrable or assignable, except to an affiliate; and (vi) be exchangeable into Shares of NYX at any time after 6 months from their date of issue, in whole or in part, upon 35 days' advance written notice to NYX's subsidiary, at the then applicable exchange ratio (the "Exchange Ratio"), which initially will be 8.0 million Shares (the "Initial Exchange Ratio") (derived by calculating the Initial Liquidation Preference by $5.00). The Exchange Ratio will increase after six months at an initial rate of 3.0%, followed by 6.0% every six months from months 12 to 24 and 9% every six months thereafter.
Concurrent Private Placement
In addition to the Offering, a US institutional investor will subscribe to purchase from the Company 25,000 Debenture Unit Subscription Receipts at a price of $1,000 per Debenture Unit Subscription Receipt on a private placement basis, for total gross proceeds of $25.0 million (the "US Private Placement").
Share Purchase Agreement Amendment
In addition to the Offering, the Company announces that on or prior to the closing of the Offering, NYX and Amaya have agreed to enter into an amendment to the share purchase agreement dated April 9, 2015, to clarify, among other things, that NYX will acquire the entire issued share capital of Cryptologic and a wholly-owned subsidiary of NYX will acquire the entire issued share capital of Chartwell. The Purchase Agreement will also clarify that the aggregate purchase price for the Acquisition of $150 million, subject to working capital adjustments, will be payable as to $110.0 million in cash from the proceeds raised under the Offering and the US Private Placement and partly through the issuance of $40.0 million of the Preferred Shares, which securities will be exchangeable for Shares as described above under "Amaya Exchangeable Preferred Shares".
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in the United States or in any other jurisdiction in which such offer, solicitation or sale would be unlawful. The securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements thereunder.
About NYX Gaming Group Limited
NYX Gaming Group is headquartered in Las Vegas with development out of Stockholm and Sydney. The group provides market leading content and technology to some of the largest lotteries, casinos and gaming operators across the globe. Through its recent acquisition of Ongame Network Ltd., a real money poker provider since 2001, NYX Gaming Group now offers a B2B poker network in both Europe and the United States. NYX Poker compliments our suite of casino, bingo and lottery games that players can enjoy on desktop, web and mobile. NYX Gaming Group Limited is listed on the TSX Venture Exchange (TSXV:NYX).
Certain information in this news release constitutes forward-looking statements under applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "potential" or the negative of these terms or other similar expressions. Forward-looking statements in this news release include, but are not limited to, future-oriented financial information and financial outlooks, within the meaning of securities laws, information relating to the timing and completion of the Acquisition, the US Private Placement and the Offering and the anticipated benefits of such Acquisition, including the timing and value of revenue and earnings growth potential. In particular, there can be no assurance that the Acquisition or the US Private Placement or the Offering will be completed on terms satisfactory to the Company, if at all. Forward-looking statements are based on certain assumptions about the business regarding expected growth, results of operations, performance, industry trends and growth opportunities. While the Company considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. Readers are cautioned not to place undue reliance on forward-looking statements.
Forward-looking statements by their nature necessarily involve risks and uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future events, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to: credit, market, currency, operational, liquidity and funding risks, including changes in economic conditions, interest rates or tax rates, the impact of government regulation on the online gaming industry and the risk that such regulation is subject to change, competition from other providers of online gaming services, the possibility that the Company be unable to complete the Acquisition and successfully integrate the business as described herein, the risks associated with international and foreign operations, the impact of consolidations in the online gaming industry and the other risks discussed under the heading "Risk Factors" in the Company's final long form prospectus dated December 18, 2014. The foregoing factors are not intended to represent a complete list of the factors that could affect the Company or the Acquisition. The Company does not intend or undertake to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.
Neither the 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.
SOURCE NYX Gaming Group Limited
For further information: Matt Davey, Chief Executive Officer, NYX Gaming Group Limited, 1-702-586-8428, www.nyxgg.com; Renée Lam, Investor Relations, TMX Equicom, (416) 815-0700 or 1-800-385-5451 ext. 258, [email protected]