Business
Century Casinos Enters into Definitive Agreement to Acquire Nugget Casino Resort in Nevada
COLORADO SPRINGS, Colo., Feb. 23, 2022 /PRNewswire/ -- Century Casinos, Inc. (Nasdaq Capital Market®: CNTY) ("Century Casinos" or the "Company"), announced
About this update from Century Casinos, Inc.
[{"type":"text","content":"COLORADO SPRINGS, Colo., Feb. 23, 2022 /PRNewswire/ -- Century Casinos, Inc. (Nasdaq Capital Market®: CNTY) (\"Century Casinos\" or the \"Company\"), announced that it entered into a definitive agreement to acquire 50% of Smooth Bourbon, LLC (\"PropCo\") and 100% of Nugget Sparks, LLC (\"OpCo\") dba Nugget Casino Resort (\"Nugget\") from Marnell Gaming, LLC for $195 million. The Company will also have a five-year option to purchase the remaining 50% of PropCo for $105 million plus 2% per annum. \n\n \n \n \n \n \n \n\n \nThe Company will purchase its 50% interest in PropCo for $95 million, which represents a capitalization rate of 7.9% based on preliminary 2021 numbers. PropCo owns the land and building underlying the Nugget and will enter into a lease of the property to OpCo for an annual rent of $15 million. Following required approvals from the Nevada Gaming Commission, the Company will purchase 100% of OpCo for $100 million, which represents an implied earnings before interest, taxes, depreciation and amortization, as adjusted (\"Adjusted EBITDA\")* before pro forma rent expense, multiple of 5.6x based on preliminary 2021 numbers. The estimated multiple excludes any potential cost synergies and operational improvements. The acquisition of OpCo is expected to meaningfully enhance the Company's free cash flow as well as be immediately accretive to earnings.\nIn connection with the acquisition, Goldman Sachs Bank USA has provided a commitment letter for $350 million in senior secured term loan financing to support the acquisition, refinance Century Casinos' existing debt and for general corporate purposes and a $30 million senior secured revolving credit facility. On a pro forma basis upon acquisition of OpCo, the Company anticipates net leverage to be approximately 3.0x. \n\"We have been looking at entering the Reno market for a long time, and we believe the Nugget is a perfect fit for our portfolio. We look forward to welcoming the great team at the Nugget to Century Casinos,\" Erwin Haitzmann and Peter Hoetzinger, Co-Chief Executive Officers of Century Casinos remarked. \"We believe there is a lot of upside to this transaction and that we identified some areas of improvement to continue the Nugget's growth. We expect the Nugget to seamlessly integrate and provide added synergies for Century Casinos' US portfolio,\" they conc...