Sec Form 13D Filing - CLAIRVEST GROUP INC filing for Accel Entertainment Inc. (ACEL) - 2019-12-02

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No.     )

ACCEL ENTERTAINMENT, INC.

(Name of Issuer)

Class A-1 Common Stock, par value $0.0001 per share

(Title of Class of Securities)

00436Q106

(CUSIP Number)

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

November 20, 2019

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box  ☐

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Exchange Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Exchange Act (however, see the Notes).

The class of equity securities to which this statement relates is Class A-1 Common Stock, par value $0.0001 per share, of Accel Entertainment, Inc., a Delaware corporation (“Accel” or the “Issuer”). The principal executive offices of Accel are located at 140 Tower Drive, Burr Ridge, Illinois 60527.

This statement is being filed by the following persons (each a “Reporting Person” and, collectively, the “Reporting Persons”):

Clairvest Group Inc., CEP V Co-Investment Limited Partnership, Clairvest Equity Partners V Limited Partnership and Clairvest Equity Partners V-A Limited Partnership (collectively, “Clairvest Group”) are each organized under the laws of Canada. Clairvest Group Inc. is the general partner of each of CEP V Co-Investment Limited Partnership, Clairvest Equity Partners V Limited Partnership and Clairvest Equity Partners V-A Limited Partnership. The business address of Clairvest Group is 22 St. Clair Avenue East, Suite 1700, Toronto, Ontario, Canada M4T 2S3. Clairvest Group is a Toronto-based private equity firm which invests in mid-market companies, principally in North America, across a wide array of industries.

The business address of Gordon S. Rubenstein is 140 Tower Drive, Burr Ridge, Illinois 60527. Gordon S. Rubenstein is a director and co-founder of Accel. Gordon S. Rubenstein is a U.S. citizen.

The business address of Andrew H. Rubenstein is 140 Tower Drive, Burr Ridge, Illinois 60527. Andrew H. Rubenstein is the Chief Executive Officer and co-founder of Accel. Andrew H. Rubenstein is a U.S. citizen.

Information with respect to the executive officers and directors of Clairvest Group (collectively, the “Related Persons”), including name, business address, present princip al occupation or employment and the organization in which such employment is conducted, and citizenship is listed on the attached Schedule A, which is incorporated herein by reference.

During the last five years, none of the Reporting Persons or Related Persons (i) has been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Prior to the consummation of the Business Combination (as defined below), (i) Clairvest Group held 944,925 shares of Class D Preferred Stock of Accel, (ii) Gordon S. Rubenstein held the following securities of Accel: 30,832 shares of Class A Common Stock and 170,079 shares of Class B Common Stock and (iii) Andrew H. Rubenstein held the following securities of Accel: 216,814 shares of Class A Common Stock, 255,322 shares of Class B Common Stock, 24,177 shares of Class C(2) Preferred Stock, 28,050 shares of Class C(3) Preferred Stock and 2,140 shares of Class C(4) Preferred Stock (collectively, the “Accel Predecessor Securities”). Pursuant to the Business Combination, each of the Accel Predecessor Securities were converted into Class A-1 Common Stock of Accel at an approximate ratio of 1:17.18853.

Clairvest Group acquired its respective Accel Predecessor Securities for an aggregate purchase price of $40,301,122.33. Clairvest Group obtained the funds to purchase its respective Accel Predecessor Securities through capital contributions from its limited and general partners.

Gordon S. Rubenstein acquired his respective Accel Predecessor Securities primarily through capital contributions to Accel.

Andrew H. Rubenstein acquired his respective Accel Predecessor Securities primarily through capital contributions to Accel and the exercise of warrants and options granted to him in connection with his service as the Chief Executive Officer of Accel.

Business Combination

On November 20, 2019, Accel Entertainment, Inc. (f/k/a TPG Pace Holdings Corp.), a Delaware corporation (“New Pace”), consummated the previously announced business combination pursuant to that certain Transaction Agreement, dated as of June 13, 2019 (as amended on July 22, 2019 and October 3, 2019 and as it may further be amended from time to time, the “Transaction Agreement”), by and among New Pace, each of the shareholders of Accel Entertainment, Inc., an Illinois corporation (“Accel”) named as Sellers therein (each a “Seller” and collectively, including those Accel shareholders joined to the Transaction Agreement pursuant to that certain Drag-Along Agreement, dated as of June 13, 2019, by and among New Pace and each of the Sellers who had duly executed and delivered a signature page to the Transaction Agreement as of June 13, 2019, the “Sellers”) and David W. Ruttenberg and John S. Bakalar (as successor to Gordon Rubenstein) (each of David W. Ruttenberg and John S. Bakalar in their capacity as a “Shareholder Representative” and collectively, the “Shareholder Representatives”). Pursuant to the Transaction Agreement and in connection therewith, New Pace acquired, directly or indirectly, all of the issued and outstanding shares of common stock and preferred stock of Accel (the “Accel Stock”) held by the Sellers (the “Stock Purchase”); and, following the closing of the Stock Purchase, Accel merged with and into New Pace LLC, a Delaware limited liability company and a direct wholly-owned subsidiary of New Pace (“NewCo”), with NewCo surviving such merger (the “Merger” and, together with the other transactions contemplated by the Transaction Agreement, the “Business Combination”).

New Pace Warrant Agreement

On November 20, 2019, and in connection with the closing of the Business Combination, the Reporting Persons, among others, entered into New Pace Warrant Agreements, pursuant to which the Issuer has issued to each of the Reporting Persons, among others, their respective pro rata share of 2,444,444 newly issued warrants of the Issuer, each of which entitles the holder to purchase one share of Class A-1 Common Stock at an exercise price of $11.50 per share of Class A-1 Common Stock in accordance with its terms (the “New Pace Warrants”), with such pro rata share to be determined with reference to a number of shares equal to 70% of such Reporting Person’s shares of Accel Predecessor Securities less the number of shares of Accel Predecessor Securities in respect of which such Reporting Person has elected to receive cash in exchange for such shares of Accel Predecessor Securities. Each New Pace Warrant entitles the holder to purchase one Class A-1 Share at an exercise price of $11.50 per share, subject to adjustments substantially similar to those applicable to the other outstanding warrants of New Pace, at any time 30 days after the consummation of the Business Combination.

Registration Rights Agreement

On November 20, 2019, and in connection with the closing of the Business Combination, the Reporting Persons, among others, entered into that certain Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which the Reporting Persons will be entitled to registration rights in respect of any shares of Class A-1 Common Stock held by them or issuable upon the exercise of convertible securities held by them. Pursuant to the Registration Rights Agreement, at any time, and from time to time, after the consummation of the Business Combination and subject to the lock-up restrictions set forth therein, certain holders of registration rights may demand that the Issuer register for resale some or all of their Class A-1 Common Stock for so long as they continue to meet certain ownership thresholds.

The foregoing descriptions of the Registration Rights Agreement and the Warrant Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of such agreements filed as exhibits to this Schedule 13D, and incorporated herein by reference.

General

The Reporting Persons acquired the securities described in this Schedule 13D for investment purposes and they intend to review their investments in the Issuer on a continuing basis. Any actions the Reporting Persons might undertake may be made at any time and from time to time without prior notice and will be dependent upon the Reporting Persons’ review of numerous factors, including, but not limited to: an ongoing evaluation of the Issuer’s business, financial condition, operations and prospects; price levels of the Issuer’s securities; general market, industry and economic conditions; the relative attractiveness of alternative business and investment opportunities; and other future developments.

The Reporting Persons may acquire additional securities of the Issuer, or retain or sell all or a portion of the securities then held, in the open market or in privately negotiated transactions. In addition, the Reporting Persons may engage in discussions with management, the board of directors, and shareholders of the Issuer and other relevant parties or encourage, cause or seek to cause the Issuer or such persons to consider or explore extraordinary corporate transactions, such as: a merger, reorganization; sales or acquisitions of assets or businesses; changes to the capitalization or dividend policy of the Issuer; or other material changes to the Issuer’s business or corporate structure, including changes in management or the composition of the Issuer’s board of directors.

Except as set forth above, the Reporting Persons and Related Persons have no present plans or proposals which would result in or relate to any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.

(a) – (b)

The following sets forth, as of the date of this Schedule 13D, the aggregate number of shares of Class A-1 Common Stock and percentage of Class A-1 Common Stock beneficially owned by each of the Reporting Persons, as well as the number of shares of Class A-1 Common Stock as to which each Reporting Person has the sole power to vote or to direct the vote, shared power to vote or to direct the vote, sole power to dispose or to direct the disposition, or shared power to dispose or to direct the disposition of, as of the date hereof, based on 76,637,470 shares of the Issuer’s Class A-1 Common Stock outstanding as of November 20, 2019, as reported in the Current Report on Form 8-K, filed with the SEC on November 26, 2019 by the Issuer.

On November 6, 2019, Clairvest Equity Partners V Limited Partnership, Clairvest Equity Partners V-A Limited Partnership, CEP V Co-Investment Limited Partnership (collectively, the “Clairvest Investors”), Mr. Andrew H. Rubenstein and Mr. Gordon S. Rubenstein (collectively, the “Rubensteins”), entered into a Mutual Support Agreement (the “Mutual Support Agreement”) whereby each of the Rubensteins and the Clairvest Investors agreed to vote their shares of Class A-1 Common Stock beneficially owned in favor of any nominee nominated to the board of directors of the Issuer by the other party, subject to the satisfaction of certain terms and conditions set forth therein.

The foregoing description of the Mutual Support Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such agreement filed as an exhibit to this Schedule 13D, and incorporated herein by reference.

The following documents are incorporated by reference as exhibits:

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: December 2, 2019

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: December 2, 2019

SCHEDULE A

The name, present principal occupation or employment and citizenship of each of the executive officers and directors of the Reporting Persons are set forth below. The business address of each individual associated with Clairvest Group Inc., CEP V Co-Investment Limited Partnership, Clairvest Equity Partners V Limited Partnership and Clairvest Equity Partners V-A Limited Partnership is 22 St. Clair Avenue East, Suite 1700, Toronto, Ontario, Canada M4T 2S3.

Clairvest Group Inc.

EXHIBIT A

Agreement of Joint Filing

The undersigned hereby agree that a single Schedule 13D (or any amendment thereto) relating to the Class A-1 Common Stock of Accel Entertainment, Inc. shall be filed on behalf of each of the undersigned and that this Agreement shall be filed as an exhibit to such Schedule 13D.

Dated: December 2, 2019

EXHIBIT A

Agreement of Joint Filing

The undersigned hereby agree that a single Schedule 13D (or any amendment thereto) relating to the Class A-1 Common Stock of Accel Entertainment, Inc. shall be filed on behalf of each of the undersigned and that this Agreement shall be filed as an exhibit to such Schedule 13D.

Dated: December 2, 2019