Following unanimous approval from the Nevada Gaming Commission, Golden Entertainment successfully completed the acquisition of four casinos in Southern Nevada, one of which is the Stratosphere.
During a conference call about second-quarter earnings, CEO Blake Sartini discussed the deal.
The customer base of our mid-market aligns well with the clientele of American Casino & Entertainment Properties, and we are confident in our ability to successfully promote in Nevada, Montana, and Maryland.
Making the deal
The transaction was finalized for $850 million, encompassing $781 million in cash and 4 million shares of Golden Entertainment stock to the existing owners, Whitehall Real Estate Partners. Golden funded the cash segment of the transaction, with plans for enhancements through a $1 million loan and a new credit facility worth $100 million.
The Las Vegas Review-Journal reported that this move could potentially double the company’s revenue and triple its cash flow.
Charles Protell, the CFO of Golden, discussed the company’s expansion opportunities in the previously mentioned conference call.
Protell told the Las Vegas Sun, “The property does not have convention space, and we see that as a huge opportunity.”
The Sun reported that the company received financing in August.
Financing contributors include those to the $1.1 billion fund:
- JPMorgan Chase Bank
- Credit Suisse
- Macquiarie Capital
- Morgan Stanley & Co
This was allocated for the cash payment and the refinancing of existing credit facilities.
A long time coming
The Las Vegas Sun reports that Golden, the owner of PT’s Pub, taverns, slot routes, and casinos, announced in June its intentions to acquire American Casino and Entertainment Properties. Consequently, the company would assimilate:
- Stratosphere
- Arizona Charlie’s Decatur
- Arizona Charlie’s Boulder
- Aquarius
Earlier in October, the Nevada Gaming Control Board approved the deal.
The board forwarded a favorable recommendation to the Commission, which acts as the final regulatory checkpoint in the transaction. Following this stage, it was anticipated that the acquisition would finalize within days after the meeting. The transaction was indeed concluded by the end of the month.
Building excitement for what’s to come
Tony Alamo, the Chairman of the Gaming Commission, stated that the union of these two companies was a positive development.
The Stratosphere is a renowned landmark. It’s a staple of the Las Vegas vista. Despite its unfortunate location, established perhaps a quarter-century prematurely, it continues to draw visitors. The area it’s situated in faces several challenges and tends to discourage people from staying. However, I believe the northern part of the Strip is set for rejuvenation.
Philip Pro, the Commissioner, expressed his encouragement by the methods Golden used to engage communities. He specifically highlighted this in Sartini’s presentation and in the correct formation of a team.
Another commissioner conveyed his expectations.
“This is going to be spectacular, I fully expect,” John Moran conveyed to the Review-Journal.
Image courtesy of Ingus Kruklitis via Shutterstock.com
