Cineplex (TSX: CGX) is selling off non-core assets in an effort to boost its balance sheet. The entertainment giant is selling off Player One Amusement Group, the firms amusement solutions division.
The division, which sells and distributes arcade gaming equipment, as well as operates entertainment centres, has been sold to OpenGate for $155 million, which will be paid in cash and is subject to post-closing adjustments.
The business unit is believed to have generated revenues of $49.0 million in the third quarter, and $153.8 million year to date based on the most recent Management Discussion & Analysis filed by the company for the third quarter.
Adjusted EBITDAal generated by the division has amounted to $30.4 million on a year to date basis.
The transaction will see Player One continue to supply and service amusement games currently offered at Cineplex theatres under a long-term contract. Proceeds from the transaction meanwhile will be utilized for the repayment of Cineplex’s outstanding credit facility.
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“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,” commented CEO Ellis Jacob.
The deal is slated to close in the first quarter of 2024.
Cineplex last traded at $8.85 on the TSX.
Information for this story was found via Cineplex, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
