Amaya has confirmed the completion of its sale of Cadillac Jack, a move that is one of many the company has made to focus more on its core businesses, mainly PokerStars and Full Tilt.
Cadillac Jack was sold off to AGS, an entity related to Apollo Global Management, for C$476 million ($380 million).
Cadillac Jack is a gaming products supplier that creates a variety of slot machines and bingo games.
The company was first purchased by Amaya for $167 million in September 2012 in an attempt to increase the scale of the company, well before Amaya’s much greater expansion through the purchase of PokerStars last year.
Baazov Says Sale Will Benefit AGS and Amaya
According to Amaya CEO David Baazov, Cadillac Jack and Amaya enjoyed a mutually beneficial existence together, but it was time to move on.
“Cadillac Jack has expanded its business greatly under Amaya’s ownership to the credit of its management and its employees,” Baazov said. “We anticipate its combination with AGS will expedite the company’s growth strategy.”
“We are extremely pleased that we have been able to crystallize on the value that has been created within Cadillac Jack over the past two-and-a-half years for the benefit of our shareholders,” Baazov continued. “[The transaction] is also consistent with our strategy to focus on our primary growth platform, our core B2C operations.”
The sale is mostly being paid in cash by way of AGS buying all shares of Amaya Americas, the entity controlling Cadillac Jack, though there is also a C$15 million ($12 million) payment-in-kind note that will be paid (with interest) eight years after the closing date.
Some of the money from the sale will be used to repay all of Cadillac Jack’s outstanding debts.
Internal Investigation Finds No Wrongdoing
Amaya has also announced that the company has found no wrongdoing on the part of its employees in relation to Canadian securities laws.
Amaya has been the subject of an ongoing investigation by Autorite des marches financiers (AMF), the Quebec financial regulatory agency that has been looking into trading leading up to the company’s acquisition of the Rational Group (the parent company of PokerStars and Full Tilt) last June.
The AMF investigation involved a number of high-ranking employees, including CFO Daniel Sebag and Baazov himself. However, the AMF has yet to file charges against anyone at Amaya, or made any formal accusations against the company or any of its workers.
According to Ben Soave, a member of Amaya’s Compliance Committee, AMF has yet to provide any evidence that anyone associated with the company was part of any wrongdoing. Still, he said, the company conducted its own internal review into the matter.
“This review found no evidence of any violations of Canadian securities laws or regulations,” Soave said.
Baazov himself expressed confidence that the investigation would only prove that Amaya operated legally before their purchase last year.
“I believe that any concerns that I or other Amaya officers or directors violated any Canadian securities laws are unfounded and we are confident that at the end of its investigation, the AMF will come to the same conclusion,” Baazov said.
The AMF investigation is currently under a court order seal, which has prevented details of the investigation from being released to the public.