Great Canadian Gaming Corp [TSX: GC] has agreed to purchase Casino New Brunswick, a casino, hotel and multi-use entertainment and convention centre located in Moncton, New Brunswick, for about $95 million. The sellers in the transaction are Canadian private equity firm Clairvest Group, which invested in the company in 2008, and Sonco Gaming New Brunswick Ltd. The deal is expected to close in the fall of 2015, subject to the approval of regulators. In a statement, Clairvest said it expects to receive gross proceeds of about $55 million from the company’s sale. Based in Richmond, British Columbia, Great Canadian Gaming operates gaming facilities in Canada and the United States.
Great Canadian Gaming announces agreement to purchase Casino New Brunswick
RICHMOND, BC, May 12, 2015 /CNW/ – Great Canadian Gaming Corporation [TSX:GC] (“Great Canadian” or “the Company”) announced today that the Company has agreed to purchase the assets and undertaking of Casino New Brunswick (“CNB”) from Sonco Gaming New Brunswick Limited Partnership (“Sonco”), whose general partner is Sonco Gaming New Brunswick Limited, for approximately $95 million. The Company’s acquisition, which will be funded by existing cash balances, will include ownership and operation of CNB’s existing casino, hotel and a multi-use entertainment and convention centre. CNB, located in Moncton, New Brunswick, was developed by Sonco and commenced operations in May 2010. In 2014, the facility, which is the only full service casino in the province of New Brunswick, generated approximately $38 million in revenues. The purchase price represents an acquisition multiple of approximately 8.0x – 8.5x the casino’s 2014 normalized EBITDA.
“The acquisition of Casino New Brunswick represents an important opportunity for value creation and will allow Great Canadian to further expand its Canadian footprint,” stated Rod N. Baker, the Company’s President and Chief Executive Officer. “We are very much looking forward to the potential of working with the New Brunswick Lotteries and Gaming Corporation, the Department of Public Safety Gaming Control Branch and the City of Moncton. Casino New Brunswick is a high-quality gaming and entertainment facility that serves as both a local casino for guests from Moncton as well as a destination casino for guests from throughout New Brunswick and from other areas of Atlantic Canada. We are extremely excited at the prospect of welcoming CNB and its over 400 employees to the Great Canadian team.”
The Casino Service Provider Agreement with the New Brunswick Lotteries and Gaming Corporation operates until December 31, 2030. The purchase and sale of CNB remains subject to the consent of the New Brunswick Lotteries and Gaming Corporation and required regulatory approvals. The closing is expected to occur in the fall of 2015.
ABOUT GREAT CANADIAN GAMING CORPORATION
Great Canadian Gaming Corporation operates gaming, entertainment and hospitality facilities in British Columbia, Ontario, Nova Scotia, and Washington State. The Company’s 16 gaming properties consist of three community gaming centres, four racetracks, and ten casinos, including one with a Four Diamond resort hotel. Further information is available on the Company’s website, www.gcgaming.com.
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 its historical trends and other factors. 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, expected future expenditures, costs, operating and financial results, expected impact of future commitments, and expectations and implications of changes in legislation and government policies. Forward-looking information may be identified by words such as “anticipate”, “believe”, “expect”, or similar expressions. 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; the outcome of restructuring of gaming in Ontario; the Company’s ability to obtain and renew required business licenses, leases, and operational services agreements; the future of horse racing in Ontario, unanticipated fines, sanctions and suspensions imposed on the Company by its regulators; impact of global liquidity and credit availability; possible reassessments of the Company’s prior tax filings by tax authorities; 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 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; non-realization of cost reductions and synergies; 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 2014, and as identified in the Company’s disclosure record on SEDAR at www.sedar.com.
Readers are cautioned not to place undue reliance on the forward-looking information, as there can be no assurance that the plans, intentions, or expectations upon which they are based will occur. 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. 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, restructuring and other, and foreign exchange gain and other. EBITDA is derived from the statements of earnings, and can be computed as revenues less human resources expenses, and property, marketing and administration expenses. The Company believes 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. EBITDA is also used by the investors and analysts for the purpose of valuing the Company. Normalized EBITDA, as defined by the Company, means EBITDA 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 may include adjustments for certain costs that are not expected to continue subsequent to acquisition and for anticipated revenues based on recent casino operating agreement amendments.
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.
ON BEHALF OF
GREAT CANADIAN GAMING CORPORATION
“Original Signed By Rod N. Baker”
Rod N. Baker
President and Chief Executive Officer
GREAT CANADIAN GAMING CORPORATION [TSX:GC]
Suite #350 – 13775 Commerce Parkway
SOURCE Great Canadian Gaming Corporation
For further information: For investor enquiries: Email: email@example.com, or, Ms. Tanya Ruskowski, Executive Assistant to the President & CEO and the CFO, (604) 303-1000; For media enquiries: Mr. Chuck Keeling, Vice-President, Stakeholder Relations and Responsible Gaming, (604) 303-1018
Photo courtesy of Casino New Brunswick