Mr. Doug Pollard reports
POLLARD BANKNOTE ANNOUNCES THE CLOSING OF THE ACQUISITION OF SCHAFER SYSTEMS
Pollard Banknote Ltd. has closed the previously announced purchase of substantially all of the operating assets and business of Schafer Systems Inc., the leading global provider of lottery ticket dispensers and play stations.
This announcement follows completion of the closing conditions included in the definitive agreement dated Sept. 25, 2018. As part of the former employee stock ownership plan (ESOP), the employees and former employees of Schafer who remained members of the ESOP, and the ESOP trustee, were required to approve the transaction through a formal vote, which the company is happy to announce was overwhelmingly in favour of the acquisition.
"We are very pleased to close the acquisition and particularly gratified with the vote of confidence provided by our new colleagues at Schafer," stated Doug Pollard, co-chief executive officer of Pollard. "We look forward to providing lotteries the same great service and innovative retail products they are used to receiving from Schafer and, in combination with the resources available in Pollard, expanding Schafer's reach to new geographic and technological opportunities. The Schafer retail knowledge base will fit extremely well in the Pollard portfolio of tools available to our lottery customers and assist us greatly in maximizing growth at the retail level."
Schafer was founded in 1986 in Adair, Iowa, and has built its business largely on creating innovative products including lottery ticket dispensers and point-of-purchase displays for the lottery industry. As the foremost supplier of lottery ticket dispensers, Schafer has partnered with all 44 existing U.S. lotteries and over 50 lotteries in other countries during its three decades in business. Based in western Iowa, Schafer employs approximately 50 full-time employees and is the recognized leader in assisting lotteries to efficiently and effectively distribute its instant-win scratch tickets to consumers.
With a focus on solutions to increase sales at the retail location for the lottery industry and on the development of innovative and proprietary products, Schafer is a leader and key partner to the lotteries for on-counter and wall-mounted modular dispensers with promoters, in-counter dispensers, ticket menu boards, cheque writers, literature holders, promotional products, mounting fixtures, pop-ups, stands, play stations, and game centres in a variety of sizes, configurations and materials.
The total acquisition purchase price was $23.5-million (U.S.) (approximately $30.6-million using an exchange rate of $1.30 per U.S. dollar) prior to any standard working capital adjustments, with 100 per cent all cash consideration being financed from existing Pollard Banknote cash resources and availability under the company's existing senior credit facility. Schafer has a long history of profitability and the acquisition is expected to be accretive to Pollard Banknote's net income.
John Pollard, co-chief executive officer of Pollard Banknote, concluded: "Our strategic vision continues to set the foundation for our business: being the partner of choice for the lottery and charitable gaming industry. The closing of the acquisition of the Schafer business is another important step in achieving that vision. Adding the industry-leading solution in the retailing of instant tickets follows that vision and allows Pollard to remain the thought leader among the suppliers to lotteries around the world. We look forward to working with the great team at Schafer."
About Pollard Banknote
Pollard Banknote is a leading lottery partner to more than 60 lotteries around the world, providing high-quality instant ticket products, licensed games, and a full suite of digital offerings ranging from game apps to comprehensive player engagement and i-lottery solutions, including strategic marketing and management services.
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