Recently, Golden Entertainment Inc., a flagship operator of slot routes, casinos and taverns based in Las Vegas, revealed that it has finalized the formerly mentioned sale of Rocky Gap Casino Resort in Maryland for a total cash consideration of roughly $260 million, subject to customary equity capital adjustments.
Purchase agreements:
Under the terms of the agreements, Century Casinos, Inc. of Colorado purchased the Rocky Gap business for roughly $56.1 million, subject to customary working capital adjustments, and New York-based VICI Properties Inc. purchased a stake in the buildings and land connected with Rocky Gap for roughly $203.9 million. Additionally, $175 million of the revenue from the sale will be used to repay outstanding term loans.
During the transaction process, Macquarie Capital took the role of exclusive financial advisor, and Latham & Watkins and Duane Morris were Golden’s legal advisors.
Main reasons for the purchases:
The purchase by Century Casinos was because the company will now have the possibility to further extend Rocky Gap to attract more customers from neighboring markets and enter the Maryland casino market. On a related note, Century said: “We have amended our triple-net master-lease agreement with VICI to add the Rocky Gap property. The amendment includes an increase in initial annualized rent of about $15.5 million.” In addition, Century funded the purchase with cash from its balance sheet and $30 million loaned from a revolving credit deal with Goldman Sachs. In this regard, in a statement, Erwin Haitzmann and Peter Hoetzinger, co-CEOs of Century Casinos, said: “Rocky Gap is a great addition to our portfolio for expanding into Maryland.”
Rocky Gap is a good investment because it is located in Flintstone at Rocky Gap State Park, which lures over half a million visitors annually. It covers 270 acres and involves a 196-room hotel, meeting spaces, an event center, an 18-hole golf course and a spa designed by Jack Nicklaus. Also, the casino is 25,000 square feet with 16 table games and 630 slot machines. What’s more, Rocky Gap recently underwent a re-modelling process, worth $10 million, of the hotel, restaurants, slot machines and sports lounge.
State of the companies after the transaction:
As for Century and Golden Entertainment, the former now has 19 casinos across the world with over 7,500 gaming machines and 268 table games, while the latter company now has eight casinos located in southern Nevada and 65 gaming taverns in Nevada. Also, through its distributed gaming businesses in Montana and Nevada, the company also operates video game devices in almost 1,000 locations.