OG真人官网 Portfolio Updates – Top Aces & Accel Entertainment
Toronto, Ontario (November 27, 2019) – OG真人官网 Group Inc. (TSX: CVG) (“OG真人官网”) is pleased to announce that two investment partners have completed positive material transactions that will impact OG真人官网’s carrying value of these investments. The transactions and their impact on OG真人官网’s carrying value are described below.
On November 26, 2019, Top Aces, a portfolio company of OG真人官网 and OG真人官网 Equity Partners IV (“CEP IV”) completed an equity financing of $100 million from existing shareholders as well as a new investor, Caisse de dépôt et placement du Québec (“CDPQ”). The financing will support Top Aces’ international expansion into the United States after its recent award of an IDIQ, through which it expects to provide aggressor support services to the United States Air Force. OG真人官网 and CEP IV made a combined $5 million follow-on investment as part of this equity financing. Based on the valuation ascribed to this equity financing and including the $2.0 million follow-on investment made by OG真人官网, OG真人官网’s carrying value in Top Aces would be increased to $80.3 million compared to the September 30, 2019 carrying value of $54.8 million. Reflecting income taxes, carried interest and share based compensation, this has an approximately $1.35 per share positive impact on book value per share.
Accel Entertainment, Inc. (“Accel Entertainment”), a portfolio company of OG真人官网 and OG真人官网 Equity Partners V (“CEP V”), completed its proposed business combination with TPG Pace Holdings Corp. on November 20, 2019. In support of the transaction, OG真人官网 and CEP V rolled 100% of their equity interest in Accel Entertainment into the new combined entity (“Accel”) and received 16,241,871 Class A-1 Shares, 1,223,368 Class A-2 Shares and 996,840 private warrants of Accel. The Class A-1 Shares are publicly listed on the NYSE under symbol ACEL. On a standalone basis, the 16,241,871 Class A-1 Shares held by OG真人官网 and CEP V represents 21.2% of the total Class A-1 Shares outstanding. OG真人官网 and CEP V are subject to a 6-month hold period on the Class A-1 Shares. OG真人官网 and CEP V have customary registration rights with respect to their Class A-1 Shares and would expect any sale of such shares to be conducted pursuant to a resale prospectus. The Class A-2 Shares vest over a three-year period and the conversion into Class A-1 Shares are subject to certain criteria based on share price or earnings. The private warrants are currently out of the money, have a strike price of US$11.50 per share and expire in five years.
OG真人官网 holds its Accel investment through CEP V Co-Investment Limited Partnership, which holds 4,872,570 Class A-1 Shares, 367,011 Class A-2 Shares and 299,052 private warrants of Accel. Based on the November 26, 2019 closing price of the Class A-1 Shares (NYSE: ACEL) of US$10.45 per share, the 4,872,570 Class A-1 Shares have an aggregate market value of US$50.9 million, compared to the September 30, 2019 carrying value of its interest in Accel of US$37.7 million. Reflecting a 10% discount to the price of the Class A-1 Shares due to the various restrictions on selling these shares and assuming a nominal value on the Class A-2 Shares and the private warrants, income taxes, carried interest and share based compensation, this has an approximately $0.60 per share positive impact on book value per share.