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The transaction is expected to be materially accretive to earnings per share, provide a long-term partnership with the world's largest provider of online poker, and deliver substantial synergies and diversification to NYX's core business.
TORONTO, April 9, 2015 /CNW/ - NYX Gaming Group Limited ("NYX" or the "Company") (TSXV: NYX) is pleased to announce that it has entered into a share purchase agreement (the "SPA") to acquire the entire issued share capital of Amaya (Alberta) Inc., formerly Chartwell Technology Inc. ("Chartwell") and CryptoLogic Limited ("CryptoLogic" and together with Chartwell, the "B2B Business"), each of which is a wholly-owned subsidiary of Amaya Inc. ("Amaya"). Earlier this year, Amaya announced its intention to divest the B2B Business and its other non-core B2B assets in order to pay down debt and/or buy back shares. Amaya had previously granted NYX a right-of-first-offer to acquire the B2B Business concurrent with Amaya's sale of Ongame Network Ltd. to NYX in November, 2014.
Pursuant to the terms of the SPA, NYX will acquire the B2B Business for CAD$150.0 million in cash, subject to working capital adjustments (the "Acquisition"). The B2B Business is being acquired on a cash-free, debt-free basis. The Acquisition is anticipated to close before the end of the third quarter of 2015 and is subject to financing and other customary closing conditions. As part of the Acquisition, on closing NYX will enter into a preferred supplier licensing agreement (the "Licensing Agreement") with a subsidiary of Amaya to provide certain casino gaming content to Amaya's real-money casino offering ("Amaya Casino"), which will be integrated into the PokerStars and Full Tilt branded casino websites (the "PokerStars Casino").
The B2B Business owns some of the world's leading gaming content, which consists of approximately 300 games and has integrated onto its remote gaming server top game titles from several of the world's leading game developers. The B2B Business also operates a real-money gaming platform and services some of the world's leading online casino providers. For the fiscal year 12 month unaudited period ending December 31, 2014, the B2B Business generated approximately CAD$17.4 million in revenue and an earnings before interest, taxes, depreciation and amortization ("EBITDA") loss of approximately CAD$7.6 million. Management expects substantial synergies as a result of the Acquisition of approximately CAD$7.0 to CAD$9.0 million (of which over half is expected to be realized in the first twelve months), excluding the revenues generated from the Licensing Agreement, as further outlined below.
The Licensing Agreement will have a term of six years and will provide Amaya with access to the combined library of NYX content and the newly acquired Chartwell and Cryptologic content.
Highlights of the Acquisition and the Licensing Agreement include:
- Provides NYX with a customer that management believes will be one of the world's fastest growing online casino operations;
- Will increase NYX's game library from approximately 350 to 650 games and its customer base from approximately 130 to over 170;
- Minimum license commitment by Amaya Casino of CAD$12.0 million per year to NYX for each of the first three years of the Licensing Agreement, as the Amaya Casino business achieves scale;
- NYX proprietary content will be prominently displayed across the Amaya Casino slot pages;
- Expected to generate substantial synergies of approximately CAD$7.0 to CAD$9.0 million, excluding the revenues generated from the Licensing Agreement;
- Materially accretive to near-term earnings per share; and
- Increases NYX's operating and public markets profile.
NYX intends to finance the Acquisition through a combination of cash on hand, new debt and/or issuance of equity. Canaccord Genuity Corp. is acting as exclusive financial advisor for NYX with respect to the Acquisition.
"We are excited about this acquisition and partnership, which will provide NYX with additional leading gaming content and access to what we believe will be one of the world's fastest growing online casinos. As part of our agreement to acquire Ongame we negotiated a right of first offer to purchase the Cryptologic and Chartwell business as we saw it as highly strategic to our existing business. This transaction completes the strategy we embarked upon with Ongame. We believe there to be a substantial growth opportunity in the PokerStars and Full Tilt casino offering, which we anticipate benefiting from as part of our licensing agreement with Amaya. We have substantial equity and debt financing options available to us to fund the Acquisition," said Matt Davey, CEO of NYX.
"We are pleased to further deepen our relationship with NYX as a strategic partner and supplier to our B2C online casino operations," said David Baazov, CEO of Amaya. "This transaction is consistent with our stated strategy of divesting our non-core B2B assets, while still giving us the ability to offer popular games and new and innovative titles on a regular basis from Chartwell, CryptoLogic, and now NYX."
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 Toronto TSX Venture Exchange (TSX-V: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, statements with respect to accretive earnings, anticipated revenue and costs synergies associated with the acquisition of the B2B Business. In particular, there can be no assurance that the Acquisition will be completed, or that any financing alternatives that may be available to the Company to fund the Acquisition will be realized on terms satisfactory the Company, if at all. Forward looking statements are based on certain assumptions regarding the B2B 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 on-line 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 successfully integrate the B2B 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 publically update any forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws. Any forward-looking statements or facts (including financial information) related to the B2B Business discussed or disclosed herein are derived from information obtained from Amaya and publicly available sources and has not been independently verified by the Company.
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 Ltd.
For further information: Matt Davey, Chief Executive Officer, NYX Gaming Group, (702) 586-8428, www.nyxgg.com; Renée Lam, Investor Relations, TMX Equicom, (416) 815-0700 or 1-800-385-5451 ext. 258, [email protected]