COQUITLAM, BC and TORONTO, Dec. 19, 2017 /CNW/ - Great
Canadian Gaming Corporation (TSX:GC) ("Great Canadian") and
Clairvest Group Inc. (TSX:CVG) ("Clairvest") announce today
that they have been selected as the successful proponent by the
Ontario Lottery and Gaming Corporation ("OLG") to operate certain
gaming facilities in the West Greater
Toronto Area (the "West GTA Bundle").
The West GTA Bundle is comprised of OLG Casino Brantford, OLG
Slots at Mohawk Racetrack, OLG Slots at Flamboro Downs and OLG
Slots at Grand River Raceway. These facilities have a combined
total of over 2,500 slot machines, approximately 60 table games,
employ more than 1,400 staff, and generated approximately
$450 million in gross gaming revenue
in fiscal 2017.
Great Canadian and Clairvest will invest through a newly formed
partnership, Ontario Gaming West GTA Limited Partnership (the
"Partnership"), with Great Canadian owning 55 per cent and
Clairvest owning 45 per cent. Great Canadian will develop and
operate the gaming facilities within the West GTA Bundle on behalf
of the Partnership.
As a result of this award, the Partnership will acquire all the
gaming assets in the West GTA Bundle and will enter into leases for
each of the facilities. It will have the exclusive right to
operate these assets for a minimum period of 20 years, in
accordance with the requirements of a Casino Operating and Services
Agreement. The closing will be completed under the terms of a
Transition and Asset Purchase Agreement entered into with
OLG.
With years of gaming, racing, hospitality, and development
expertise, the Partnership will provide strategic vision and
operational modernization that will add extensive non-gaming
amenities and expanded gaming offerings to ensure properties in the
West GTA Bundle deliver a premier gaming and entertainment
experience. The Partnership intends on a significant capital
investment in each of the four properties to expand and reposition
them that at full build out will create up to 1650 new jobs in
gaming, entertainment, and hospitality, while also ensuring each
property appeals to a wide spectrum of the marketplace.
The Partnership envisions dramatic enhancements and additions at
Mohawk, Flamboro Downs, and Grand
River that will create a seamless and integrated experience
for the guest for racing, gaming and hospitality, while undertaking
a significant top-to-bottom renovation of the Brantford facility.
With years of experience in horse racing in Ontario and other jurisdictions, the
Partnership looks forward to collaborating with racing industry
stakeholders to work toward the ongoing sustainability of horse
racing in the West GTA marketplace. The Partnership also recognizes
the significance of these properties in their local communities,
and appreciates the importance of engaging early with local
community leaders, stakeholder groups, and First Nations.
"Being awarded the West GTA Bundle is a true milestone for Great
Canadian and the Partnership. We thank OLG for their confidence in
our company and for providing us the opportunity to showcase and
apply our gaming, racing, hospitality and development expertise to
the selected properties," said Rod N.
Baker, Great Canadian's President and CEO. "As a Canadian
company that has a long history of responsibly and successfully
operating gaming and racing facilities across Canada, we are excited to undertake what we
feel will be a dramatic transformation of the entertainment
experience at these four properties, for the teams that work there,
and the communities they reside in."
Baker continued, "With our longstanding role in horse racing, we
appreciate the significance and importance of the harness racing
industry provincially, but more particularly, across the West GTA
region. We're eager not only to embark upon our exciting
development plans for the four properties, but also for the role we
feel we can play in working with track operators, racing
stakeholders, OLG, the provincial government and other interested
parties in sustaining the industry and growing the number of jobs
the industry supports."
"We are thrilled that OLG has selected the Partnership as the
service provider for the West GTA Bundle. Together with Great
Canadian, we are confident in our ability to deliver a unique and
spectacular gaming and entertainment experience at the four
properties within the bundle," said Jeff
Parr, Co-Chief Executive Officer and Managing Director of
Clairvest Group Inc.
The closing date for the acquisition of the assets and
assumption of certain liabilities from OLG, including the signing
of a Casino Operating and Services Agreement with OLG, is expected
to be in spring 2018, allowing for a seamless operational
transition. Closing is subject to regulatory approvals and other
customary conditions.
About Great Canadian Gaming Corporation:
Founded in
1982, Great Canadian Gaming Corporation is a BC based company that
operates 22 gaming, entertainment and hospitality facilities in
British Columbia, Ontario, New
Brunswick, Nova Scotia, and
Washington State. Fundamental to
the company's culture is its commitment to social responsibility.
"PROUD of our people, our business, our community" is Great
Canadian's brand that unifies the company's community, volunteering
and social responsibility efforts. Under the PROUD program, Great
Canadian annually invests over $2.5
million in our communities, and in 2016, over 1,500
charitable organizations were supported by Great Canadian. In each
Canadian gaming jurisdiction, a significant portion of gross gaming
revenue from gaming facilities is retained by our crown partners on
behalf of their provincial government for the purpose of supporting
programs like healthcare, education and social services.
About Clairvest Group Inc.:
Clairvest Group Inc. is a
private equity investor which invests its own capital, and that of
third parties through the Clairvest Equity Partners ("CEP") limited
partnerships, in businesses that have the potential to generate
superior returns. In addition to providing financing, Clairvest
contributes strategic expertise and execution ability to support
the growth and development of its investee partners. Clairvest
realizes value through investment returns and the eventual
disposition of its investments.
DISCLAIMER
This press release contains certain "forward-looking
information" or statements within the meaning of applicable
securities legislation. Forward-looking information is based
on the Company's current expectations, estimates, projections and
assumptions that were made by the Company in light of historical
trends and other factors. Forward-looking statements are
frequently but not always identified by words such as "expects",
"anticipates", "believes", "intends", "estimates", "potential",
"targeted", "planned", "possible" or similar expressions or
statements that events, conditions or results "will", "may",
"could" or "should" occur or be achieved. All information or
statements, other than statements of historical fact, are
forward-looking information including statements that address
expectations, estimates or projections about the future, the
Company's strategy for growth and objectives (including
participation in Ontario's gaming
modernization program and possible expansion of gaming in
British Columbia), expected future
expenditures, costs, operating and financial results, expected
impact of future commitments, the future ability of the Company to
operate the Georgian Downs and Flamboro Downs facilities beyond the
terms of the signed Ontario Lease Agreements and Ontario Racing
Agreements, the impact of conditions imposed on certain VIP players
in British Columbia, the impact of
unionization activities, the Company's position on its claim
against the British Columbia Lottery Corporation ("BCLC") with
respect to the collection of marketing contributions, the Company's
beliefs about the outcome of its notices of objection challenging
the Canada Revenue Agency's reassessments and its tax position on
its facility development commission prevailing, the terms and
expected benefits of the normal course issuer bid, and expectations
and implications of changes in legislation and government
policies. Such forward-looking information is not a guarantee
of future performance and may involve a number of risks and
uncertainties.
Although forward-looking information is based on information and
assumptions that the Company believes are current, reasonable and
complete, they are subject to unknown risks, uncertainties, and a
number of factors that could cause actual results to vary
materially from those expressed or implied by such forward-looking
information. Such factors may include, but are not limited to:
terms of operational services agreements with lottery corporations;
changes to gaming laws that may impact the operational services
agreements, pending, proposed or unanticipated regulatory or policy
changes (including those that impact VIP play); the outcome of
modernization of gaming in Ontario; the Company's ability to obtain and
renew required business licenses, leases, and operational services
agreements; unanticipated fines, sanctions and suspensions imposed
on the Company by its regulators; impact of global liquidity and
credit availability; actual and possible reassessments of the
Company's prior tax filings by tax authorities; the results of the
Company's notices of objection and subsequent appeals challenging
reassessments received by the Canada Revenue Agency; the Company's
tax position on its facility development commission prevailing; the
results of the Company's litigation with BCLC; adverse tourism
trends and further decreases in levels of travel, leisure and
consumer spending; competition from established competitors and new
entrants in the gaming business; dependence on key personnel; the
timing and results of collective bargaining negotiations; adverse
changes in the Company's labour relations; the Company's ability to
manage its capital projects and its expanding operations; the risk
that systems, procedures and controls may not be adequate to meet
regulatory requirements or to support current and expanding
operations; potential undisclosed liabilities and capital
expenditures associated with acquisitions; negative connotations
linked to the gaming industry; First Nations rights with respect to
some land on which we conduct our operations; future or current
legal proceedings; construction disruptions; financial covenants
associated with credit facilities and long-term debt; credit,
liquidity and market risks associated with our financial
instruments; interest and exchange rate fluctuations; demand for
new products and services; fluctuations in operating results;
economic uncertainty and financial market volatility; technology
dependence; and privacy breaches or data theft. The Company
cautions that this list of factors is not exhaustive. Although
the Company has attempted to identify important factors that could
cause actual actions, events or results to differ materially from
those described in forward-looking information, there may be other
factors that cause actions, events or results not to be as
anticipated, estimated or intended. These factors and other
risks and uncertainties are discussed in the Company's continuous
disclosure documents filed with the Canadian securities regulatory
authorities from time to time, including in the "Risk Factors"
section of the Company's Annual Information Form for fiscal 2016,
and as identified in the Company's disclosure record on SEDAR at
www.sedar.com.
The Company believes that the expectations reflected in
forward-looking statements are reasonable but no assurance can be
given that these expectations will prove to be correct. Readers are
cautioned not to place undue reliance on the forward-looking
information. The forward-looking information contained herein is
made as of the date hereof, is subject to change after such date,
and is expressly qualified in its entirety by cautionary statements
in this press release. Forward-looking information is provided for
the purpose of providing information about management's current
expectations and plans and allowing investors and others to get a
better understanding of the Company's operating
environment. The Company undertakes no obligation to publicly
revise forward-looking information to reflect subsequent events or
circumstances except as required by law.
The Company has included non-International Financial Reporting
Standards ("non-IFRS") measures in this press
release. Adjusted EBITDA, as defined by the Company, means
earnings before interest and financing costs (net of interest
income), income taxes, depreciation and amortization, share-based
compensation, impairment reversal of long-lived assets, business
acquisition, restructuring and other, and foreign exchange (gain)
loss and other. Adjusted EBITDA is derived from the condensed
interim consolidated statements of earnings and other comprehensive
loss, and can be computed as revenues plus share of profit of
equity investment less human resources expenses, and property,
marketing and administration expenses. The Company believes
Adjusted EBITDA is a useful measure because it provides information
to management about the operating and financial performance of the
Company and its ability to generate operating cash flow to fund
future working capital needs, service outstanding debt, and fund
future capital expenditures. Adjusted EBITDA is also used by
investors and analysts for the purpose of valuing the
Company. Adjusted shareholders' net earnings, as defined by
the Company, means shareholders' net earnings plus or minus items
of note that management may reasonably quantify and that it
believes will provide the reader with a better understanding of the
Company's underlying business performance. Items of note may
vary from time to time and in this press release include
pre-opening costs, restructuring severance costs, impairment
reversal of long-lived assets, FDC revenues previously deferred at
Casino Nanaimo, other and the related income taxes thereon.
Readers are cautioned that these non-IFRS definitions are not
recognized measures under International Financial Reporting
Standards ("IFRS"), do not have standardized meanings prescribed by
IFRS, and should not be construed to be alternatives to net
earnings determined in accordance with IFRS or as indicators of
performance or liquidity or cash flows. The Company's method
of calculating these measures may differ from methods used by other
entities and accordingly our measures may not be comparable to
similarly titled measures used by other entities or in other
jurisdictions. The Company uses these measures because it
believes they provide useful information to both management and
investors with respect to the operating and financial performance
of the Company.
SOURCE Great Canadian Gaming Corporation