COQUITLAM, BC and TORONTO, May 1,
2018 /CNW/ - Great Canadian Gaming Corporation (TSX: GC)
("Great Canadian") and Clairvest Group Inc. (TSX:CVG)
("Clairvest"), through its Clairvest Equity Partners V
partnerships, announced today that they have successfully
completed the acquisition of the gaming assets in the West Greater Toronto Area (the "West GTA
Bundle") for a purchase price of approximately C$134 million.
Great Canadian and Clairvest established the Ontario Gaming West
GTA Limited Partnership ("the Partnership"), in which Clairvest
owns 45% and Great Canadian owns 55%. The Partnership was selected
as the successful proponent by the Ontario Lottery and Gaming
Corporation ("OLG") to operate the following West GTA gaming
facilities: OLG Casino Brantford, OLG Slots at Mohawk Racetrack,
OLG Slots at Flamboro Downs and OLG Slots at Grand River
Raceway.
The Partnership has signed a casino operating and services
agreement ("COSA") with OLG to take over day-to-day operations of
the gaming facilities in the West GTA Bundle. The Partnership has
entered into a five year credit agreement that has funded
approximately 65% of the acquisition costs and will provide
financing for the initial capital development program of the
Partnership.
Effective May 1, 2018, the West
GTA facilities will be re-named as Elements Casino Brantford,
Elements Casino Flamboro, Elements Casino Grand River and Elements
Casino Mohawk. 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 $460
million in gross gaming revenue in fiscal 2017/18.
In accordance with the COSA, the Partnership will have the
exclusive right to operate these facilities for a minimum period of
20 years.
With the transition process complete, the Partnership will focus
on initiatives and capital investments that will modernize and
broaden the guest experience at each facility. The Partnership
intends to work closely with stakeholders as it enhances and
transforms the facilities located in the West GTA Bundle, while
maintaining a focus on responsible gambling.
About Great Canadian Gaming Corporation:
Founded in
1982, Great Canadian Gaming Corporation is a BC based company that
operates 28 gaming, entertainment and hospitality facilities in
Ontario, British Columbia, 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 2017, over 1,900 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:
Clairvest Group Inc. is a private
equity management firm that invests its own capital, and that of
third parties through the Clairvest Equity Partners 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.
DISCLAIMER
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
