Intertain announces closing of Jackpotjoy Acquisition, entering into of debt facilities and redemption of debentures

TORONTO, April 8, 2015 /CNW/ - The Intertain Group Limited ("Intertain" or the "Company") (TSX: IT) announced today that it has completed the acquisition of the Jackpotjoy, Starspins and Botemania brands and related assets (the "Jackpotjoy Acquisition") for an initial purchase price consisting of cash and share consideration worth approximately £425.8 million, subject to a customary working capital adjustment (the "Initial Purchase Price"), plus certain cash earn out payments. 

The Initial Purchase Price was financed through a combination of: (a) the net proceeds of the Company's  C$483 million bought public offering of subscription receipts of Intertain (the "Subscription Receipt Offering"); (b) the previously announced US$352.5 million senior secured credit facilities (the "Credit Facilities"), consisting of a US$335.0 million term loan (the "Term Facility") and a US$17.5 million revolving credit facility (the "Revolving Facility"), which were entered into by the Company and The Intertain Group Finance LLC, a wholly-owned US subsidiary of the Company (together with the Company, the "Borrowers") with, among others, Macquarie US Trading LLC (as administrative agent and collateral agent) and Macquarie Capital (USA) Inc. (as sole bookrunner and sole lead arranger); and (c) the issuance of 7,361,365 Intertain shares (at $14.73 per share) to Gamesys.

A portion of the net proceeds of the Subscription Receipt Offering (the "Redemption Amount") has been deposited with CST Trust Company (the "Trustee") and will be used to redeem Intertain's outstanding senior secured 8.5% debentures (the "Debentures"), which have a maturity date of June 30, 2019 and an aggregate principal amount of approximately C$51.2 million. The Company has issued a notice of redemption, which provides that the Debentures will be redeemed on Thursday, May 7, 2015 (the "Redemption Date") at a redemption price of 104% of the principal amount of the Debentures, plus accrued and unpaid interest up to but excluding the Redemption Date (the "Redemption Price"). Due to the deposit of the Redemption Amount with the Trustee, any obligations of the Company in respect of the Debentures have been fully paid and satisfied. All rights of the holders of Debentures, other than the right to receive the Redemption Price upon presentation and surrender of the Debentures have terminated.

Noel Hayden, principal shareholder, founder and Managing Director of Gamesys Limited has joined the board of directors of Intertain as a non-executive director, and following the closing of the Jackpotjoy Acquisition will become the largest individual shareholder of Intertain with such shares being subject to a two-year lock-up period.

"I'm delighted to complete this exciting deal and become part of Intertain's strategy to further strengthen its global position in online bingo", said Noel Hayden, Managing Director of Gamesys. "Both our companies share this vision and I look forward to working with Fitz and the Intertain team to maximize value for Intertain shareholders."

"We are very excited about the completion of the Jackpotjoy Acquisition, which is expected to add substantial free cash flow to our business and allow Intertain to further target the female demographic in regulated markets," said John Kennedy FitzGerald, CEO of Intertain. "In addition to acquiring the world's leading online bingo-led business, we have also entered into a long-term relationship with one of the most well respected technology and gaming operators, Gamesys. I personally look forward to working with Noel and his team on our global expansion strategy, and I want to thank all of our shareholders for their ongoing support of Intertain."

With the closing of the Jackpotjoy Acquisition, the subscription receipts of Intertain have been exchanged on a one-for-one basis for Intertain shares without payment of additional consideration or further action. The subscription receipts, which previously traded on the Toronto Stock Exchange under the symbol "IT.R", will be delisted at the close of business today. The Subscription Receipt Offering was undertaken on a bought deal basis by a syndicate of underwriters led by Canaccord Genuity Corp. ("Canaccord"). Canaccord also acted as exclusive financial advisor to Intertain with respect to the Jackpotjoy Acquisition.

Borrowings under the Credit Facilities will bear, at the Borrowers' election, an annual interest rate of either (i) the LIBOR rate plus an assumed margin of 6.50%, if LIBOR is elected based on current market conditions; or (ii) the base rate plus an agreed margin of 5.50%, if the base rate is elected based on current market conditions.

The Term Facility will be repaid in quarterly installments equal to 2.50% (being 10.00% per annum) of the initial principal amount of the loans with the remaining balance due on the seventh anniversary of the date hereof. The Revolving Facility will be made available until the fifth anniversary of the date hereof.

The Credit Facilities are guaranteed by each of the Borrowers' existing and subsequently acquired or formed wholly-owned direct and indirect subsidiaries, subject to certain exceptions (the "Guarantors" and, together with the Borrowers, the "Credit Parties" and each, a "Credit Party"). The obligations of each Credit Party in respect of the Credit Facilities will be secured by a perfected first priority security interest (subject to certain permitted liens) in each of the Credit Parties' tangible and intangible assets (except for certain rights, to the extent prohibited by applicable law).

About Intertain

Intertain is an online gaming company that provides entertainment to a global consumer base. Intertain currently offers bingo and casino to its customers using the InterCasino www.intercasino.com, Costa www.costabingo.com, Vera&John www.verajohn.com and other brands.  For more about Intertain please visit www.intertain.com.

FORWARD-LOOKING STATEMENTS

This press release contains forward looking information within the meaning of Canadian securities laws, including with respect to the Debt Facilities and the redemption of the Debentures. This forward looking information is based on certain assumptions, which the Company considers to be reasonable, based on information currently available; however, they may prove to be incorrect. Forward-looking information is subject to a number of 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: credit, market, currency, operational, liquidity and funding risks, including changes in economic conditions, interest rates or tax rates, limited operating history, the fact that on-line gaming is a heavily regulated industry and that such regulation is subject to change, competition from other providers of online gaming services, the possibility that the Company be unable to successfully integrate any proposed assets to be acquired, the risks associated with international and foreign operations and the risks discussed under the heading "Risk Factors" in Intertain's annual information form for the year ended December 31, 2014, 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 Offering. 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.

SOURCE The Intertain Group Limited