Press Release

Pollard Banknote Announces The Acquisition Of Schafer Systems

WINNIPEG, Manitoba, September 25, 2018 /CNW/ Pollard Banknote Limited (TSX: PBL) (“Pollard Banknote” or “Pollard”) announced today that it has signed a definitive agreement, subject to closing conditions, to purchase (“Acquisition”) substantially all of the operating assets and business of Schafer Systems, Inc. (“Schafer”), the leading global provider of lottery ticket dispensers and play stations.

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 their 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, check writers, literature holders, promotional products, mounting fixtures, pop-ups, stands, play stations, and game centers in a variety of sizes, configurations, and materials.

“We are extremely excited about bringing the Schafer team into the Pollard organization and believe it will be a strategically important new product for us to help lotteries maximize their retail sales and generate greater proceeds for their good causes,” said Doug Pollard, Co-Chief Executive Officer of Pollard Banknote. “The addition of the world’s leading lottery retail dispensing experts is another key component in Pollard’s strategic focus on being the partner of choice for the lottery industry. We welcome our new team members from Schafer and are confident their three decades of setting the standard with innovative leadership and award-winning products will continue to drive retail lottery excellence. This acquisition ticks all of the important boxes for us, both strategically and financially.”

“Schafer’s business will be extremely complimentary to our existing portfolio of lottery products such as loyalty solutions, sales force management and warehousing and distribution services currently offered by Pollard in addition to our core instant-win scratch ticket operations. Continued innovation will be critical in expanding and growing lottery revenue through the use of efficient, eye-catching consumer and retailer friendly dispensing solutions, and the Schafer team will now be supported by the Pollard group of companies and resources to fuel their growth.”

The management team of Schafer will be continuing in their roles after the transaction and will work closely with our lottery focused team in Pollard to ensure a smooth transition and integration to continue supporting the lottery industry.

The total Acquisition purchase price is $23.5 million U.S. dollars (approximately $30.6 million CDN dollars using an exchange rate of $1.30 CDN dollar per U.S. dollar) plus standard working capital adjustments, with 100% all cash consideration being funded from existing Pollard Banknote cash resources and availability under our 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. Closing conditions include standard consents and approvals consistent with a transaction of this size and nature. In addition, the business was formerly operated in Schafer Systems, Inc. which was structured as a subsidiary of Owner Revolution Inc. (“ORI”), which is wholly-owned by an Employee Stock Ownership Plan (“ESOP”). As a result, the Acquisition will be subject to an approval vote of the active and former employees who remain members of the ESOP and the ESOP trustee. We expect all conditions of closing to be completed early in the fourth quarter of 2018.

Don Hudak, ORI’s CEO and President, commented on the pending transaction saying, “The sale of Schafer to Pollard Banknote brings together two organizations that have successfully served the lottery and gaming industries for many years. Working together, they will represent a real powerhouse in the markets and will be able to bring innovative products and solutions to customers at an even higher level.”

John Pollard, Co-Chief Executive Officer of Pollard Banknote concluded, “We are thrilled with the opportunity to join together with the Schafer team and are confident that with the closing of this transaction Pollard will add another industry leading solution dedicated to helping our lottery customers succeed. Assisting lotteries in maximizing their retail sales will also benefit our core instant-win scratch ticket sales, highlighting the strategic and financial benefits of bringing together a variety of lottery solutions in one organization. Pollard Banknote’s commitment to grow our organization both organically and through acquisitions will continue and we look forward to continued success with Schafer.”

About Pollard Banknote

Pollard Banknote is a leading lottery partner to more than 60 lotteries worldwide, providing high quality instant ticket products, licensed games, and a full suite of digital offerings ranging from game apps to comprehensive player engagement and iLottery solutions, including strategic marketing and management services. The company is a proven innovator and has decades of experience helping lotteries to maximize player engagement, sales, and proceeds for good causes. Pollard Banknote also plays a major role in providing pull-tab tickets, bingo paper and its Diamond Game and Oasis-branded electronic ticket machines to charitable and other gaming markets in North America. Established in 1907, Pollard Banknote is owned approximately 67.6% by the Pollard family and 32.4% by public shareholders, and is publicly traded on the TSX (PBL). For more information, please visit our website at

Forward-looking Statements

Certain statements in this press release may constitute “forward-looking” statements and information, which involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. When used in this document, such statements include such words as “may,” “will,” “expect,” “believe,” “plan,” and other similar terminology. These statements reflect management’s current expectations regarding future events and operating performance and speak only as of the date of this document. There should not be an expectation that such information will in all circumstances be updated, supplemented, or revised whether as a result of new information, changing circumstances, future events, or otherwise.



Doug Pollard
Co-Chief Executive Officer

John Pollard
Co-Chief Executive Officer

Rob Rose
Chief Financial Officer

Pollard Banknote Limited
Telephone: (204) 474-2323