Amaya acquires Diamond Game Enterprises

The purchase price was USD 25 million, subject to customary post-closing purchase price adjustments, to acquire 100% of the equity of Diamond Game and retire its debt. Amaya paid US$18 million on closing of the Transaction from cash on hand with a US$7 million holdback for certain contingent liabilities and other items.

Diamond Game recorded revenues and adjusted EBITDA of approximately US$17.8 million and US$3.9 million respectively in 2012. Its revenues and adjusted EBITDA were approximately US$14.0 and $2.8 million in 2011. The majority of the company’s revenues are recurring and are primarily generated from fixed fee or revenue sharing arrangements that it has in place for its gaming machines.

“We’re pleased to have completed the purchase of Diamond Game, an innovator in lottery technology with multiple patents, and excited to have the company’s staff become part of Amaya’s global team,” said David Baazov, CEO of Amaya.

“Placements of Diamond Game’s latest lottery product, the LT-3, have grown substantially over the past year and we foresee that growth continuing, including in new jurisdictions. We anticipate integrating games from Amaya’s extensive library of titles into Diamond Game’s lottery technology.”
“Additionally, we plan to leverage our network of relationships to provide new revenue opportunities for Diamond Game while leveraging Diamond Game’s U.S. lottery relationships to potentially expand deployment of Amaya’s gaming solutions. We anticipate this acquisition will be immediately accretive to adjusted EBITDA,” he concluded.

Diamond Game has approximately 2,000 machines in 100 locations across 10 jurisdictions. The Company offers over 60 game titles. It holds licences/approvals in approximately 10 states/provinces/territories and more than 20 U.S. Native American jurisdictions.
Diamond Game has two primary business units: its Casino Products division develops products for the VLT, Class II bingo, Class III commercial casino and racetrack markets; its Lottery Products division creates innovative products for the public gaming and charity markets, most notably its 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’s industry-leading development of ITVMs with video display has resulted in the recognition of numerous product patents. The LT‐3 is Diamond Game’s most recent iteration of its patented functionality and advanced array of features. The LT-3 is designed for ‘stay and play’ use, thereby creating longer play sessions and higher sales volumes and enabling lotteries to expand their existing retailer base into less traditional venues where traditional slot machines may not be permitted, such as bingo halls, social clubs, veterans offices, bars and taverns.
The LT-3 can be customized to serve varying market needs, offering different cabinet types, display types, ticket types and other additional features. Diamond Game currently has LT-3 machines placed in veterans clubs and bingo halls in Anne Arundel County, Maryland, bingo halls in Ontario, Canada, fraternal and veteran’s clubs across Missouri, and bingo and fraternal halls in New Mexico.

*Adjusted EBITDA is a non-IFRS measure. Adjusted EBITDA as defined by the Corporation means earnings before interest, income taxes, depreciation and amortization, and non-recurring costs.