OpenGate Capital has agreed to acquire the Player One Amusement Group division of Cineplex at a transaction value of C$155 million.
Player One Amusement Group (P1AG), under a revenue sharing model, provides amusement gaming equipment and outsourced operations and maintenance services to theater chains, family entertainment centers, bowling centers, resorts, restaurants, and trampoline parks. P1AG’s products include video games, pinball machines, table games, kiddie rides, vending machines, and virtual reality games among many others.
Toronto-headquartered P1AG has approximately 2,400 customer locations and manages more than 20,000 equipment assets across North America.
“We proudly built the P1AG business, through several acquisitions and organic growth, to become a North American leader in amusement gaming solutions which has delivered strong, consistent results, especially coming out of the pandemic. As we continue to focus on our growth plan, the strategy to divest P1AG came at an opportune time to strengthen our balance sheet,” said Ellis Jacob, the president and CEO of Cineplex. “We thank the talented employees of P1AG, and we look forward to working with them as a commercial partner and supplier to Cineplex going forward.”
“Player One represents a dynamic investment and opportunity to enter the resilient and growing amusement solutions market,” said Andrew Nikou, OpenGate’s founder and managing partner. “As corporate carve-out specialists, we are ready to bring the full force of our operations team to support the business and management team in this next stage of growth.”
Through September 2023, P1AG had TTM revenues of C$194 million and an adjusted EBITDA of approximately C$36 million. Based on a purchase price of C$155 million this equals an EBITDA valuation multiple of 4.3x.
As part of this transaction, P1AG will enter into a long-term agreement to continue to supply and service amusement games in Cineplex’s theatres and other entertainment venues.
Cineplex (TSX:CGX) operates cinemas across Canada, primarily under the brand Cineplex Cinemas. The company also owns family entertainment centers under the brands The Rec Room and Playdium, the rewards loyalty program Scene+, the e-commerce Cineplex Store, film distributor Cineplex Pictures and the digital advertising business Cineplex Media. Cineplex has annual revenues of more than C$650 million and is headquartered in Toronto.
OpenGate invests in companies that have revenues from $50 million to $1 billion and specializes in corporate carve-outs and complex situations. The firm was founded in 2005 and is based in Los Angeles with an additional office in Paris.
Scotiabank and TD Securities are the financial advisors to Cineplex on this transaction which is expected to close during the first quarter of 2024.
© 2023 Private Equity Professional | November 29, 2023
