Seven Aces Limited Announces New US$165 Million Credit Facility and Acquisition of Additional Gaming Contracts

TORONTO, ON / ACCESSWIRE / January 29, 2020 / Seven Aces Limited (the "Corporation") (TSXV:ACES) is pleased to announce that Lucky Bucks, LLC ("Lucky Bucks"), the Corporation's 70% owned subsidiary, has entered into a definitive credit facility agreement with a syndicate of lenders led by KeyBank National Association (NYSE: KEY) (the "Credit Facility"), pursuant to which Lucky Bucks is entitled to borrow up to an aggregate of US$165 million. KeyBank National Association and KeyBanc Capital Markets Inc. (together, "KeyBank") are acting as a joint lead arranger and a joint bookrunner, and as administrative agent and collateral agent under the Credit Facility. The proceeds of the Credit Facility will be used to finance the acquisition of gaming contracts and associated skill-based digital gaming terminals from Shivbhakti, Inc. ("Game Vendor"), refinance Lucky Bucks' existing indebtedness, fund certain fees and expenses associated with the closing of the Credit Facility and the related transactions, finance additional acquisitions, investments and capital expenditures from time to time, fund working capital, and fund other general corporate purposes of Lucky Bucks. Lucky Bucks entry into the Credit Facility would have resulted in an estimated interest expense savings of approximately US$4 million based on Lucky Bucks' trailing twelve months from September 30, 2019.

"This announcement reflects the recognition of the maturity of the Georgia coin-operated amusement machine market, and the risk profile of our business. This credit facility provides interest expense savings and an unmatched flexibility to execute on our acquisition pipeline", said Manu K. Sekhri, Chief Executive Officer of the Corporation.

Credit Facility Details

The Credit Facility is comprised of a revolving credit facility in an aggregate principal committed amount of US$50,000,000, an initial term loan facility in an aggregate principal funded amount of US$100,000,000, and a delayed draw term loan facility in an aggregate principal committed amount of US$15,000,000.

The Credit Facility will be available to Lucky Bucks on agreed upon terms including the following:

• The interest rate under the Credit Facility is LIBOR plus a margin between 2.0% and 2.75% (or a base rate equivalent) based on Lucky Bucks' total leverage ratio. The total interest rate at close will be approximately 4.5%. The Credit Facility reduces Lucky Bucks' effective financing interest rate from approximately 9-10% to approximately 4.5% (subject to LIBOR fluctuation).

• The acquisition of Game Vendor closed simultaneously with the initial borrowing under the Credit Facility.

• The Credit Facility will be available immediately upon closing.

• The maturity date of the Credit Facility is 5 years after closing.

• The Credit Facility is secured by substantially all of the assets of Lucky Bucks and a pledge of the equity interests in Lucky Bucks made by its immediate parent company, and is to be guaranteed by any of Lucky Bucks' future subsidiaries.

Lucky Bucks' ability to draw on the Credit Facility is subject to borrowing covenants and conditions precedent typical of a credit facility of this nature. Lucky Bucks will pay KeyBank an arrangement fee, an upfront fee (a portion of which will be paid to the other lenders), and an annual administration fee, all of which are typical of these arrangements.

Acquisition of Additional Gaming Contracts

The Corporation also announces that Lucky Bucks has completed the acquisition of 160 gaming contracts and associated skill-based digital gaming terminals from Game Vendor (the "Acquisition"), initially announced in the Corporation's press release dated December 20, 2019. The purchase price for the Acquisition was US$32.5 million on closing, with potential additional payments that could result in the aggregate consideration payable increasing to a range of US$36 million to US$38 million (as currently best estimated by Lucky Bucks) in the event of the satisfaction of certain conditions related to post-closing revenue generation. Any such post-closing payments, if made, would be payable by Lucky Bucks on or before the date that is 12 months from the closing date.

About Seven Aces Limited

Seven Aces Limited is a gaming company, with a vision of building a diversified portfolio of world class gaming operations. The Corporation looks to enhance shareholder value by growing organically and through acquisitions. Currently, the Corporation is the largest route operator of skill-based gaming machines in the State of Georgia, United States of America.

Additional information about the Corporation is available online at www.sevenaces.com.

For further information please contact:

Manu K. Sekhri
Chief Executive Officer, Director
Tel. (416) 477-3414
[email protected]

Stephanie Lippa
Office Manager
Tel. (416) 477-3411
[email protected]

Cautionary Statement Regarding Forward-Looking Information

This news release may contain forward-looking statements or "forward-looking information" within the meaning of applicable Canadian securities laws ("forward-looking statements"). Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.

All forward-looking statements reflect the Corporation's beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward-looking statements. All of the Corporation's forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions listed below. Although the Corporation believes that these assumptions are reasonable, this list is not exhaustive of factors that may affect any of the forward-looking statements. The key assumptions that have been made in connection with the forward-looking statements include the following: the digital gaming terminals being fully-licensed by the Georgia Lottery Corporation, the continuation of the Corporation's consolidation strategy in the Georgia gaming market, the growing footprint of Seven Aces in the Georgia gaming market, generating value for the shareholders of the Corporation, the regulatory regime governing the business of Seven Aces in Georgia, the exchange rate between the U.S. dollar and Canadian dollar, the ability to grow the business and delivering returns for shareholders, the availability of high growth, high margin opportunities, continuing to add high performing locations and the execution of the Corporation's business strategy and acquisition pipeline, the performance of acquired digital skill-based gaming terminals after the closing of the Acquisition, the ability of the Corporation to accurately estimate the quantum of any post-closing payments in connection with the Acquisition, the maturity of the Georgia coin-operated amusement machine market, the risk profile of the Lucky Bucks business, unmatched flexibility to execute on the acquisition pipeline.

Forward-looking statements involve known and unknown risks, future events, conditions, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, prediction, projection, forecast, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the Corporation's ability to continue to execute a growth strategy through acquisitions and the Corporation's ability to generate higher margins and significant growth in cash flows. Although the Corporation has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

The Corporation disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise, except in accordance with applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

SOURCE: Seven Aces Limited