Business Context and Reporting Period
This Form 8-K Current Report, dated June 1, 2022, announces the completion of an acquisition by Accel Entertainment, Inc. (the "Company"). The Company acquired all outstanding equity interests of Century Gaming Inc. ("Century"), a Montana corporation, pursuant to a Securities Purchase Agreement originally dated March 2, 2021.
Key Financial Metrics and Transaction Details
The transaction involved a total purchase price of approximately $164.2 million. The consideration was structured as follows:
- Cash Consideration: Approximately $45.5 million paid to equity holders (subject to customary adjustments).
- Debt Repayment: Approximately $113.2 million used to repay Century's indebtedness.
- Stock Consideration: 515,622 shares of the Company's Class A-1 common stock issued to Century's management group.
Financing: The cash portion of the transaction was financed through a draw of approximately $160 million from the Company's existing revolving credit facility and delayed draw term loan facility under its Credit Agreement with Capital One, National Association.
Material Changes
The primary material change reported is the addition of Century Gaming Inc. to the Company's portfolio of assets. This acquisition expands the Company's operations, though specific financial metrics for Century (revenue, profit, margins) are not provided in this filing and are scheduled to be filed in an amendment within 71 days.
Outlook, Risks, and Unusual Items
Regulatory and Compliance: The issuance of stock consideration was made in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act and Rule 506. Recipients of the stock are subject to "lock-up" provisions and restrictive legends.
Future Filings: The Company indicated that financial statements of the acquired business and pro forma financial information will be filed as part of an amendment to this report no later than 71 calendar days after the filing date.
Press Release: A press release announcing the closing was issued on June 1, 2022, and is furnished as Exhibit 99.1.
Investor Verification Checklist
- Verify the final adjusted cash consideration amount once customary adjustments are calculated.
- Review the upcoming amendment (due within 71 days) for Century's historical financial statements and pro forma impact on Accel's consolidated results.
- Confirm the impact of the $160 million debt draw on the Company's current leverage ratios and liquidity position.
- Monitor the integration progress of Century Gaming Inc. into Accel's existing operations.