Acquisition Creates World's
Largest Publicly-Traded Online Gaming Company
MONTREAL,
Aug. 1, 2014 /CNW/ - Amaya Gaming
Group Inc. (TSX: AYA) ("Amaya" or the "Corporation") announced
today the completion of its previously announced acquisition of
100% of the issued and outstanding shares of privately held Oldford
Group Limited ("Oldford Group"), the parent company of Isle of
Man-headquartered Rational Group Ltd. ("Rational Group"), the owner
and operator of the PokerStars and Full Tilt Poker brands, in an
all-cash transaction for an aggregate purchase price of
$4.9 billion (the "Purchase Price"),
including certain deferred payments and subject to customary
purchase price adjustments (the "Acquisition"). All $ figures are
in US dollars unless noted otherwise.
"We are extremely pleased to have completed this
Acquisition," said David Baazov,
Chairman and CEO of Amaya. "Through PokerStars, Full Tilt and its
multiple live poker tours and events, Rational's brands comprise
the world's largest poker business, generating diversified and
recurring revenues across the globe from its extremely loyal
customer base.
Rational's success is attributable to the company's
core values of integrity, customer focus, and challenge. These
values are ingrained in the DNA of the company's staff located
across the globe, led by Rational's deep, experienced executive and
leadership teams. We intend for Rational to maintain this culture
and will support its initiatives to continue growing this world
class business."
Rational Group Founder and CEO Mark Scheinberg said: "Since launching
PokerStars in 2001 we have grown the business each year thanks to
constant innovation, unparalleled customer service, and the talent
of our dedicated workforce. While myself and other founders are
departing, we are happy to see the business and the brands we have
developed, along with the teams behind them, transferred to strong
new ownership. I'm confident that Amaya, together with Rational
Group's leadership, will continue to successfully grow the business
into the future."
FINANCING DETAILS
The Purchase Price (excluding certain deferred
payments) and fees and expenses relating to the Acquisition and the
related financing that have been paid by closing of the Transaction
were financed through a combination of cash on hand, new debt, a
private placement of subscription receipts, a private placement of
common shares and a private placement of non-voting convertible
preferred shares, allocated as follows:
- $1.05 billion of convertible
preferred shares, $600 million of
which were subscribed by funds or accounts managed or advised by
GSO Capital Partners LP or its affiliates. Terms of the convertible
preferred shares are included in the Corporation's Management
Information Circular dated June 30,
2014, which was filed on SEDAR.
- C$640 million of subscription
receipts at C$20 per subscription
receipt which were automatically converted on a one-to-one basis
into common shares upon closing of the Acquisition.
- Certain funds or accounts managed or advised by GSO Capital
Partners LP or its affiliates purchased $55
million of common shares at C$20 per share.
- Senior Secured Credit Facilities in the aggregate principal
equivalent amount in US Dollars of approximately $2.92 billion, and consisting of the
following:
-
- a $1.75 billion seven-year first
lien term loan priced at Libor plus 4.00%, and a €200 million
seven-year first lien term loan priced at Euribor plus 4.25%, in
each case with a 1.00% floor;
- a $100 million five-year first
lien revolving credit facility priced at Libor plus 4.00%, none of
which was drawn at completion; and
- an $800 million eight-year second
lien term loan priced at Libor plus 7.00%, with a 1.00% floor.
- Approximately $213 million from
cash on hand, which includes the $50
million deposit made on June 12,
2014.
ADVISORS
Deutsche Bank Securities Inc. and Canaccord Genuity
Corp. acted as lead financial advisors to Amaya in connection with
the Acquisition. Macquarie Capital and Barclays acted as
co-advisors. Houlihan Lokey acted as
financial advisor to Oldford Group. Amaya was represented by
Osler, Hoskin & Harcourt LLP
in connection with corporate and securities matters, including the
offering of convertible preferred shares, subscription receipts and
common shares. Greenberg Traurig, LLP acted as lead counsel to
Amaya in connection with the Acquisition, the senior secured credit
facilities and U.K., The
Netherlands and U.S. matters, with Fox Rothschild, LLP being
retained as special gaming counsel by the Corporation. Cains served
as Isle of Man counsel to Amaya in connection with the Acquisition.
McCarthy Tétrault LLP acted as legal advisor to the underwriters
with respect to the Subscription Receipt offering and Canadian
legal advisor to GSO, with White & Case LLP acting as U.S. and
U.K. legal advisor to GSO. The syndicate of lenders under the term
loan facilities was represented by Cahill
Gordon & Reindel LLP. Stikeman Elliott LLP acted as lead
advisor to Canaccord Genuity with respect to the previously
announced Convertible Preferred Share offering. The securityholders
of Oldford Group were represented by Herzog Fox & Neeman and
Appleby.
ABOUT AMAYA
Amaya provides a full suite of gaming products
and services including casino, poker, sportsbook, platform,
lotteries and electronic gaming machines and game systems. Amaya
has an expansive footprint in regulated markets through the
provision of its interactive, land-based and lottery solutions to
licensed commercial, tribal and charitable gaming operations as
well as government lotteries and gaming control agencies, in
multiple U.S. states, Canadian provinces, Native American tribal
jurisdictions, and European jurisdictions. The company supplies
online casino games to multiple Atlantic
City casinos permitted to provide real money online gaming
in New Jersey, the most recent and
thus far largest U.S. state to regulate iGaming.
ABOUT THE RATIONAL GROUP
The Rational Group operates gaming and related
businesses and brands including PokerStars, Full Tilt Poker, the
European Poker Tour, PokerStars Caribbean Adventure, Latin American
Poker Tour and the Asia Pacific Poker Tour. These brands
collectively form the largest poker business in the world,
comprising online poker games and tournaments, live poker
competitions and poker programming created for television and
online audiences. In addition to operating two of the largest
online poker sites where it has dealt more than 100 billion poker
hands and held over 800 million online tournaments, the group is
the largest producer of live poker events around the world.
Rational Group's businesses are among the most
respected in the industry for delivering high-quality player
experiences, unrivalled customer service, and innovative software.
The Group employs industry-leading practices in payment security,
game integrity, and player fund protection, offering customer
support in 29 languages. The Rational Group holds more online poker
licenses than any other e-gaming company, and works closely with
regulators around the world to help establish sensible global
regulation.
DISCLAIMERS
This News Release contains forward-looking
statements, related to the acquisition by Amaya of all of the
equity securities of Oldford Group, concerning the combined
company's cash flow and growth prospects and certain strategic
benefits of the combined company. Forward-looking statements are
typically identified by words such as "expect", "anticipate",
"believe", "foresee", "project", "could", "estimate", "goal",
"intend", "plan", "seek", "strive", "will", "may" and "should" and
similar expressions. Forward-looking statements reflect current
estimates, beliefs and assumptions, which are based on Amaya's
perception of historical trends, current conditions and expected
future developments, as well as other factors management believes
are appropriate in the circumstances. Amaya's estimates, beliefs
and assumptions are inherently subject to significant business,
economic, competitive and other uncertainties and contingencies
regarding future events and as such, are subject to change. Amaya
can give no assurance that such estimates, beliefs and assumptions
will prove to be correct.
Numerous risks and uncertainties could cause the
combined company's actual results to differ materially from the
estimates, beliefs and assumptions expressed or implied in the
forward-looking statements, including, but not limited to: failure
to realize anticipated results, including revenue growth from the
combined company's major initiatives; heightened competition,
whether from current competitors or new entrants to the
marketplace, changes in economic conditions including the rate of
inflation or deflation, changes in interest and currency exchange
rates and derivative and commodity prices; failure to achieve
desired results in labour negotiations; failure to attract and
retain key employees or effectively manage succession planning;
damage to the reputation of brands promoted by the combined
company; new, or changes to current, gaming laws in various
jurisdictions; changes in the combined company's regulatory
liabilities including changes in tax laws, regulations or future
assessments; new, or changes to existing, accounting
pronouncements; the risk of violations of law, breaches of the
combined company's policies or unethical behaviour; the risk of
material adverse effects arising as a result of litigation; and
events or series of events may cause business interruptions.
Readers are cautioned that the foregoing list of
factors is not exhaustive. Other risks and uncertainties not
presently known to Amaya or that Amaya presently believes are not
material could also cause actual results or events to differ
materially from those expressed in its forward-looking statements.
Additional information on these and other factors that could affect
the operations or financial results of Amaya or the combined
company are included in reports filed by Amaya with applicable
securities regulatory authorities and may be accessed through the
SEDAR website (www.sedar.com).
Readers are cautioned not to place undue reliance
on these forward-looking statements, which reflect Amaya's
expectations only as of the date of this News Release. Amaya
disclaims any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
This News Release is not an offer to sell or the
solicitation of an offer to buy any securities in the United States or in any jurisdiction in
which such offer, solicitation or sale would be unlawful. The
securities described in this News Release have not been and will
not be registered under the United States Securities Act of 1933,
as amended, or any state securities laws and may not be offered or
sold within the United States
absent registration or an applicable exemption from the
registration requirements of such laws.
SOURCE Amaya Gaming Group Inc.