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Amaya announces proposed acquisition of Diamond Game Enterprises

12 Jun 2013

MONTREAL, Canada -- (PRESS RELEASE) -- Amaya Gaming Group Inc. ("Amaya" or the "Corporation") (AYA.V), an entertainment solutions provider for the regulated gaming industry, announced today that it has entered into a definitive purchase agreement to acquire 100% of the issued and outstanding securities (the "Transaction") of a private, arms-length company Diamond Game Enterprises ("Diamond Game"), a designer and manufacturer of gaming related products for the global casino gaming and lottery industries.

Upon closing of the Transaction, Amaya is expected to pay US$25 million, subject to customary purchase price adjustments, to acquire 100% of the equity of Diamond Game and to retire its debt. Amaya will finance the consideration to be paid for the Transaction through cash on hand. Closing of the Transaction will be subject to Amaya receiving all necessary licensing and regulatory approvals and is expected to occur during the fourth quarter of 2013.
"Diamond Game's sale to Amaya exemplifies the hard work and dedication of our management team and employees over the past 19 years, who have established Diamond Game as an innovative supplier to the gaming industry," commented Jim Breslo, President and Chief Executive Officer of Diamond Game. "The Transaction unlocks value for both companies by pairing our patented technology, innovative products and key contracts in the Lottery segment with a well-capitalized entity in Amaya, which possesses a solid foundation of expertise throughout its organization as well as key relationships throughout the industry. The Transaction marks a significant milestone for us, and a value-maximizing opportunity for Diamond Game's shareholders which could not be overlooked by our Board of Directors."
"Diamond Game's lottery technology will increase our lottery footprint in North America while anticipated to be accretive to adjusted EBITDA," said David Baazov, CEO of Amaya Gaming Group Inc. "We see upside for its latest lottery product, the LT-3, which has already been placed in Maryland and Ontario and which Diamond Game expects to be placed in new jurisdictions in the near future. Our extensive game library can be integrated with their lottery technology."

Concurrently with the execution of the definitive purchase agreement, Amaya has agreed to make available to Diamond Game credit facilities of up to 2.5 million dollars to support equipment acquisition to fulfill existing contracts by Diamond Game until closing of the Transaction.

Expected Benefits of the Transaction
Anticipated by management to be immediately accretive to adjusted EBITDA

The Corporation has identified a number of potential synergies including:

Integrating Amaya's extensive games into Diamond Game's Lottery Technology

Leveraging Amaya's network of relationships to provide new revenue opportunities for Diamond Game

Leveraging Diamond Game's U.S. Lottery relationships for the expanded deployment of Amaya's suite of products

Overview of Diamond Game
Established in 1994 with headquarters in Los Angeles , California, Diamond Game began as an innovative leader in the Class II Native American casino market but, since 2004, has expanded into public gaming, commercial casino, racetrack and bingo markets utilizing the Lucky Tab II, and its succesor LT-3 gaming machine.
Diamond Game has approximately 1,800 machines in over 40 locations across seven jurisdictions.

Diamond Game has two primary business units:

Diamond Game's Lottery Products division creates innovative products for the public gaming and charity markets, most notably its patented LT-3 instant ticket vending machine (ITVM), which dispenses pull tab/break open or scratch tickets while simultaneously displaying the results of each ticket on a touchscreen video monitor in an entertaining fashion. Diamond Game has two existing lottery contracts with machines deployed in Maryland and Ontario.

Diamond Game's Casino Products division develops products for the VLT, Class II bingo, Class III commercial casino and racetrack markets.

Diamond Game's industry-leading development of ITVMs with video display has resulted in the recognition of numerous product patents.

Amaya provides a full suite of gaming products and services including casino, poker, sportsbook, platform, lotteries and slot machines. Some of the world's largest gaming operators and casinos are powered by Amaya's online, mobile, and land-based products. Amaya is present in all major gaming markets in the world with offices in North America, Latin America and Europe. Since the spring of 2012, Amaya acquired Cryptologic, a pioneer within online casino, Ongame, a leader within online poker, and Cadillac Jack, a successful slot machine manufacturer.

Established in 1994, Diamond Game designs, manufactures and services games and game systems for various North American gaming markets. Diamond Game's early success was as an innovative leader in the Class II Native American casino market. Since 2004, Diamond Game has expanded into public gaming, commercial casino, race track and bingo markets. Over the years, Diamond Game has developed a reputation for being a provider of high quality gaming and lottery products and systems. In addition to its headquarters in the metro Los Angeles area (Chatsworth, CA), Diamond Game operates two sales, assembly and service centers in Oklahoma City , OK and Hamilton, ON.
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