On March 9, Pollard Banknote announced that it had presented a proposal to INNOVA Gaming Group Inc. to acquire 100% of the issued and outstanding common shares of INNOVA at a price per share of $2.10, payable in cash. The proposed purchase price represents a significant premium of 39% to the closing price of the Shares on the Toronto Stock Exchange as of March 9, 2017, and represents a compelling value proposition for INNOVA shareholders. Pollard Banknote also announced that it has entered into an agreement with Amaya Inc. to support the Proposed Transaction in respect of the 8,180,000 common shares of INNOVA indirectly held by Amaya.
Pollard Banknote believes that INNOVA and its Diamond Game operating business represent unique assets that fit well within Pollard Banknote’s expanding product portfolio, and that the proposed acquisition of INNOVA would allow Pollard Banknote to further grow its partnership with lotteries seeking to expand their products and services.
By leveraging more than 30 years of experience in the lottery and charitable gaming market, Pollard Banknote believes it would provide an exceptional vehicle to increase and maximize the expansion of INNOVA’s3
product portfolio both to existing customers and by initiating new opportunities.
Pollard Banknote and INNOVA share many of the same customers and Pollard Banknote believes there are opportunities to leverage these relationships to grow the combined revenue base of Pollard Banknote and INNOVA.
Pollard Banknote believes that by leveraging key customer relationships and achieving economies and efficiencies of scale, if the Proposed Transaction is completed, the combined business would be better positioned to compete and grow in the lottery and charitable gaming sectors.
If the Proposed Transaction proceeds, Pollard Banknote expects to finance the Proposed Transaction by drawing on its syndicated credit facility and through additional subordinated debt financing to be provided by Pollard Equities Limited.
Under the terms of the Amaya Support Agreement, Amaya has agreed to vote in favor of, and/or tender all of its Shares, representing approximately 40.45% of the outstanding Shares, to the Proposed Transaction in any form, including a plan of arrangement, take-over bid or other acquisition method. Pollard Banknote has agreed that completion of the Proposed Transaction will not be subject to financing, due diligence or any other condition requiring access to information from INNOVA, and that any acquisition agreement entered into by Pollard Banknote with INNOVA in connection with the Proposed Transaction will include customary “fiduciary out”, “right to match” and termination provisions.
The Amaya Support Agreement also contains customary covenants by Amaya that it not solicit or in any manner assist with any proposal for a transaction involving INNOVA other than the Proposed Transaction.