Dealmakers: Marlon D. Goldstein, Lorne S. Cantor, Drew M. Altman.
The Deal: Canadian gambling products provider Amaya Gaming Group paid $177 million to acquire Cadillac Jack, a U.S. manufacturer of video slot machines and related products with operations in the U.S. and Mexico.
Amaya financed more than half of the purchase price with a loan.
The deal closed Nov. 5.
Details: The three Miami-based Greenberg Traurig attorneys helped Montreal-based Amaya Gaming win approval to acquire Cadillac Jack from regulatory bodies in multiple jurisdictions in Canada, Mexico and the U.S., including Native American territories.
The Greenberg Traurig attorneys worked with gaming agencies and other types of regulators in more than 30 jurisdictions across the U.S., Canada and Mexico prior to Amaya’s takeover of Cadillac Jack.
“There was also a unique overlay of regulatory issues here,” Goldstein said. “Cadillac Jack was licensed by many of those jurisdictions, and the transaction had to be structured in a way consistent with the licenses and regulatory approvals they had been granted.” In addition, “Amaya is licensed and regulated in several jurisdictions in which it operated separately.”
The law firm’s Mexico City office played a pivotal role in helping Amaya obtain prompt approvals from regulatory authorities in Mexico, where Cadillac Jack has extensive sales and service operations. “Having resources on the ground in Mexico was invaluable,” Goldstein said. Amaya, founded in 2004 and listed on the Toronto Stock Exchange under the ticker symbol AYA, sells technology-based products such as online and mobile casino games and mobile lotteries to customers in North America, Latin America, Europe and Asia. Based in Duluth, Georgia, Cadillac Jack designs and manufactures products for gambling businesses including video lottery terminals and standalone and server-based video slot machines.
The deal closed 41 calendar days after the parties reached a definitive merger agreement Sept. 25.
“It was a sprint to the finish once the first agreement was signed,” Goldstein said. “As with all major transactions, timing was an issue. Our clients wanted us to be efficient and to close as soon as possible.”
Goldstein headed a team of Greenberg Traurig attorneys in Miami and elsewhere who worked on the terms and structure of the acquisition as well as the debt financing for the deal and compliance with gaming regulations. Greenberg Traurig started working for Amaya on the Cadillac Jack deal in early July, and by that time, “the business principals at the highest levels in both companies already had conversation about the possibility of Amaya making an [acquisition] offer,” Goldstein said.
Cantor and Altman concentrated on conducting the due-diligence review of representations by Cadillac Jack and on helping Amaya structure the terms of the acquisition agreement. “Our primary focus was on the actual acquisition, as opposed to the financing portion,” Altman said.
Cantor and Altman worked closely with Goldstein to help Amaya negotiate a preliminary set of conditions, or “term sheet,” for its acquisition of Cadillac Jack. “We were involved in negotiating the term sheet … prior to going to definitive documentation” on Sept. 25, Cantor said.
The Greenberg Traurig team also did considerable pre-deal structuring of Amaya’s acquisition of Cadillac Jack to minimize tax liability under the laws of the U.S., Canada and Mexico. “There was a lot of tax planning and structuring that went into the transaction on the front end,” Goldstein said.
The deal also required a pre-closing filing with the U.S. Department of Justice to obtain federal clearance, as required by Hart-Scott-Rodino Antitrust Improvements Act, though no one expected an antitrust issue to arise. “The HSR filing is triggered based solely on the size of the transaction, irrespective of whether there’s actually a competitive-harm concern,” Altman said.
Another closing contingency was a loan agreement to finance almost two-thirds of the $177 million purchase price. A syndicate of lenders extended a $110 million loan to Amaya for acquisition financing. The loan is secured primarily by Cadillac Jack’s assets. Macquarie Capital acted as sole lead arranger and sole bookrunner in connection with the non-convertible senior debt financing.
Greenberg Traurig shareholder Cindy J.K. Davis in Atlanta “led our the effort on the financing side,” Goldstein said, and another shareholder of the law firm, Martha A. Sabol in Chicago, oversaw the deal’s compliance with gaming regulations in each jurisdiction where the parties operate.
Amaya is a new client for Greenberg Traurig. The firm started working for the company immediately after Goldstein met with Amaya’s chief executive officer and the chief financial officer in July and asked for the Cadillac Jack assignment.
The Canadian law firm Heenan Blaikie served along with Greenberg Traurig as co-counsel to Amaya in connection with the Cadillac Jack acquisition. “It was their first transaction with Amaya as well,” Goldstein said. “The company previously had used other Canadian and other U.S. counsel in its acquisitions.”
Background: Goldstein is a shareholder in the Miami office of Greenberg Traurig and who focuses on corporate and securities matters and co-chairs the firm’s national gaming practice. Cantor is a shareholder in the Miami office with extensive experience in corporate transactions. Altman is a Miami-based associate in the corporate and securities practice group.
The law firm Wilmer Cutler Pickering Hale and Dorr advised Cadillac Jack and its principal shareholder in the acquisition.
— Mike Seemuth