The agreement will see Century purchase 100% of Nugget Sparks LLC (OpCo), which owns the operations, and 50% of Smooth Bourbon LLC (PropCo), which owns the property, from Marnell Gaming for a total of $195.0m (£145.1m/€173.7m).
The deal also includes a five-year option to purchase the remaining 50% stake in PropCo for $105.0m, plus 2% per annum.
Century will pay $95.0m to acquire the initial 50% stake in PropCo, and lease the property to OpCo for an annual rent of $15.0m.
Subject to approval from the Nevada Gaming Commission, Century will also purchase 100% of OpCo for $100.0m. This acquisition, Century said, is expected to meaningfully enhance its free cash flow, as well as be immediately accretive to earnings.
In connection with the deal, Goldman Sachs Bank USA has provided a commitment letter for $350.0m in senior secured term loan financing to support the acquisition, refinance existing debt and for general corporate purposes, as well as a $30.0m senior secured revolving credit facility.
“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,” Century Casinos co-chief executives Erwin Haitzmann and Peter Hoetzinger said.
“We believe there is a lot of up-side 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 Casino’s US portfolio.”
Located in Sparks, Nevada, Nugget Casino Resort is full-service resort with a gaming floor featuring 50,200sq ft of casino space, 859 slot machines and 29 table games.
The resort also includes two hotel towers, 110,000sq ft of convention space, a 8,555-seat amphitheatre, a number of casual and fine dining options, on-site bars and lounges, and a five-story 1,200 space parking garage.
Should the deal go through as expected, the acquisition would expand Century’s North American portfolio to 10 casinos with 6,700 gaming machines and 140 table games.
The PropCo transaction and the financing are expected to close early in the second quarter of 2022, while the OpCo purchase is expected to complete within one year after the PropCo transaction, subject to approvals of the Nevada Gaming Commission.
The deal comes after Century last month ended its association with Century Casino Calgary after selling the land that houses the casino facility.
Original article: https://igamingbusiness.com/century-acquires-nugget-casino/
