[toc]After receiving a unanimous green light from the Nevada Gaming Commission, Golden Entertainment closed the deal on four Southern Nevada casinos, including the Stratosphere.
CEO Blake Sartini discussed the deal during a conference call about second-quarter earnings.
“Our mid-market customer base lines up nicely with the American Casino & Entertainment Properties customer, and we believe we can effectively promote across Nevada, Montana and Maryland.”
Making the deal
The deal closed for $850 million. It included $781 million in cash and 4 million shares of Golden Entertainment stock to current owners, Whitehall Real Estate Partners. While Golden financed the cash portion of the deal, the company planned improvements with a $1 million loan and a new $100 million credit facility.
This move could double the company’s revenue and triple its cash flow, reported the Las Vegas Review-Journal.
In the aforementioned conference call, Golden CFO Charles Protell talked about the Golden expansion opportunities.
“The property does not have convention space, and we think that’s a huge opportunity,” Protell said to the Las Vegas Sun.
The company received financing in August, reported the Sun.
Contributors to the $1.1 billion financing include:
- JPMorgan Chase Bank
- Credit Suisse
- Macquiarie Capital
- Morgan Stanley & Co
This went toward the cash payment and the refinancing of existing credit facilities.
A long time coming
According to Las Vegas Sun, Golden is a holder of PT’s Pub, taverns, slot routes, and casinos. The company announced in June its plans to buy American Casino and Entertainment Properties. In turn, the company would absorb:
- Stratosphere
- Arizona Charlie’s Decatur
- Arizona Charlie’s Boulder
- Aquarius
The Nevada Gaming Control Board approved the deal earlier in October.
The board sent a positive recommendation on to the Commission. The Commission then serves as the last regulatory stop in the deal. After this step, the purchase expected to close within days of the meeting. By month’s end, the deal closed.
Building excitement for what’s to come
Gaming Commission Chairman Tony Alamo said these two companies were two positives coming together.
“The Stratosphere is iconic. Whenever you see Las Vegas, it’s always part of the landscape. It was probably put at the right place at the wrong time, 25 years too early. It’s in a very challenged area. Everyone comes to Vegas to see it, but they don’t want to stay there. But I think the north part of the Strip is going to revitalize.”
Commissioner Philip Pro, said he was encouraged by the ways in which Golden engaged communities. He said this was particularly apparent in Sartini’s presentation and from the proper assembly of a team.
Another commissioner added his expectations.
“I fully expect this to be spectacular,” John Moran told the Review-Journal.
Photo by Ingus Kruklitis / Shutterstock.com
