Amaya Gaming heads for B2B exit with £250m Cadillac Jack sale
Toronto-based gaming giant disposes remaining B2B business after agreeing a deal with private equity firm Apollo Global Management
Amaya Gaming has sold its land-based subsidiary Cadillac Jack to private equity giant Apollo Global Management for CA$476m (£254m), as the last stage in the firm’s strategy to divest its entire B2B business.
Apollo will pay a cash consideration of $461m and a $15m payment in kind note for Amaya Americas, the holding company for Cadillac Jack, and the deal is expected to close later this year.
The deal will see Amaya receive more than double the CA$211 it paid for Cadillac Jack back in September 2012.
Amaya CEO David Baazov said Cadillac Jack had grown its business “significantly” under Amaya ownership, including expansion into new geographies and markets.
“We are confident that combining Cadillac Jack with [Apollo subsidiary] AGS presents a strong opportunity to expedite the company’s growth strategy, while at the same time crystallizing on the strong value created in the business to benefit Amaya’s shareholders,” he added.
Amaya said net proceeds of the sale would be used primarily for deleveraging, including the repayment of Cadillac Jack’s existing senior secured term loan and mezzanine debt.
The acquisition adds to Apollo’s portfolio of business interests, which also includes a stake in US casino giant Caesar’s Entertainment.
Since acquiring PokerStars and Full Tilt parent company the Rational Group for US$4.9bn last year, the firm has been exploring various ways of withdrawing from the B2B sector.
And the news comes just days after Amaya announced plans to spin off its Diamond Game lottery business through an IPO on the Toronto Stock Exchange.
Amaya Gaming’s share price was up CA$2.16 to $30.06 on the Toronto Stock Exchange at the time of writing.