TORONTO, ON--(Marketwired - December 13, 2016) - Gaming Nation Inc. (
The purchase price consists of a total cash payment of £8,800,000 with additional earn out provisions potentially increasing the total purchase price to £11,000,000. BD Sport generated approximately £4,300,000 in revenue over the last 12 month reporting period and earnings before interest, taxes and depreciation ("EBITDA") of £1,300,000 in the same period. The purchase price represents an EBITDA multiple of 6.8 x LTM EBITDA (excluding any performance based earn out payments).
The Company will pay 50% of the purchase price (£4,400,000) upon closing, 31.25% (£2,750,000) 12 months following the closing and 18.75% (£1,650,000) will be payable 24 months following the closing. In addition, there are two potential earn out payments (cash or common shares of Gaming Nation) of up to £2,200,000 (£1,100,000 each) if BD Sport achieves EBITDA targets for the twelve months ending December 31, 2017 of £1,300,000 and £1,400,000 for the twelve months ending December 31, 2018.
"Gaming Nation and its Board of Directors firmly believe the acquisition of BD Sport will prove to be extremely accretive for our shareholders based on a multiple of factors including the attractive EBITDA to free cash-flow of BD Sport's businesses, the ability to work with the existing infrastructure of BD Sport in deploying Gaming Nation's 5050 Central business within the European market as well as the substantial growth opportunities into new stadiums that BD Sport can realize when combined with 5050 Central's electronic raffle system," stated Scott Secord President/CEO Gaming Nation.
About BD Sport
BD Sport was founded in 2007 to provide stadium betting services for sports teams and brands primarily in the UK football market. BD Sport Group operates stadium betting at 31 stadiums in the UK employing 9 full-time employees and over 1,000 match day staff. BD Sport processes more than 3 million bets per season from football and rugby fans via its company BD Stadia Ltd., utilizing its own bespoke and hardware solutions developed over the last 10 years. BD Stadia Ltd. was formed in order to satisfy the demand for a better quality of service from betting providers in football stadiums. Their match day betting service is currently operational with clubs across the Premier League and Champions League including Manchester United, Manchester City, Liverpool, Arsenal, Chelsea, Tottenham Hostpur, Everton, Norwich City, Newcastle United and Sunderland.
BD Sport also provides sports marketing services for many gambling brands and rights holders in the UK and across Europe to generate new revenue streams by linking betting to sports. Their main activities include brokering, activation, live streaming and stadium betting.
Key Transaction Highlights
"BD Sport is excited about the growth opportunities that exist between Gaming Nation and our core business," said Tony Warwick and John Lee, Directors and Co-Founders of BD Sports. "We firmly believe that merging our business with Gaming Nation will provide the infrastructure and financial support to grow BD Sports business throughout Europe while providing immediate commercialization of Gaming Nation's 5050 Central business."
Immediate Growth Opportunities & Business Synergies
Forward-Looking Statements
This press release contains forward looking information within the meaning of Canadian securities laws concerning the business, operations and financial performance of the Company and BD Sport's businesses. Forward looking information includes but is not limited to statements with respect to revenues, EBITDA, free-cash-flow, earn out payments and accretive earnings. This forward looking information is based on certain assumptions regarding expected growth, results of operations, performance and business prospects and opportunities. While the Company considers these assumptions to be reasonable based on information currently available, they may prove to be incorrect. Forward-looking information is subject to a number or risks, uncertainties and other factors that could cause actual results to differ materially from what the Company currently expects. These risks, uncertainties and other factors include, but are not limited to market, currency, operational liquidity, changes in economic conditions, interest rates or tax rates, the fact that gaming is a heavily regulated industry and that such regulation is subject to change, competition from other providers, the possibility that the Company will be unable to successfully integrate any proposed assets to be acquired, the risks associated with international and foreign operations and the risks. Although the Company believes its expectations are based upon reasonable assumptions and has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended.
The foregoing factors are not intended to represent a complete list of the factors that could affect the Company and the Transaction. 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 BD Sport's businesses discussed or disclosed herein are derived from information obtained from BD Sport and has not been independently verified by the Company.
Reconciliation of Non-IFRS Measures
In this press release, the Company uses the terms "EBITDA", "EBITDA margin", "EBITDA to free-cash-flow conversion rate", "accretive" and "free-cash-flow". These terms do not have a standardized meaning in accordance with International Financial Reporting Standards ("IFRS") and, are therefore, unlikely to be comparable to similar measures presented by other companies. Rather, these measures are used to provide management and investors with additional measures of performance.
About Gaming Nation Inc.:
Gaming Nation Inc. (
For more information visit, www.gamingnationinc.com
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Contact Information:
Contact:
Scott Secord
President and CEO
416‐479‐3873
For investor inquiries, please contact
Joann Head
jhead@gamingnationinc.com