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Eldorado is selling two casinos ahead of planned acquisition of Caesars
Posted on Friday, 12 July 2019 11:21
Twin River Worldwide Holdings has agreed to pick up the operations and properties of two casinos operated by Eldorado Resorts for USD 230.00 million, subject to certain customary post-closing adjustments.
Closing is subject to regulatory and competition approvals, among other things, and is slated to complete in early 2020, in connection with the vendor’s planned USD 17.30 billion takeover of Caesars Entertainment.
The two assets include Isle of Capri Casino Kansas City and Lady Luck Casino Vicksburg, the former overlooks the Missouri River, while the latter is located along the Mississippi River.
New York-listed Twin River is adding these two assets to the four casinos it already owns and manages, two of which are based in Rhode Island, one in Mississippi and one in Delaware, as well as a Colorado horse race track.
The company is valuing Eldorado’s casinos at 8.4x trailing twelve-month proforma earnings before interest, taxes, depreciation and amortisation (EBITDA) on a combined basis.
However, this excludes the impact of any potential cost synergies or possible revenue enhancement opportunities from operational improvements and anticipated capital investment.
Twin River believes the addition will immediately boost earnings and it will fund the consideration with available cash.
Isle of Capri Casino Kansas City comprises 40,000 square feet of casino space, 939 gaming machines, 13 table games and two dining venues, while Lady Luck Casino Vicksburg is a 25,000 square foot location with 603 slot machines, eight electronic table games, three dining venues and an 89-room hotel.
For Eldorado, the news comes less than a month after it agreed to combine with Caesars to create the largest owner and operator of US gaming assets.
The business, without Caesars, owns twenty-six properties across 12 states, generating adjusted EBITDA of USD 166.65 million, on revenue of USD 635.82 million in the three months to 31st March 2019.
Separately to the announcement, Twin River filed a questions and answers for investors regarding its modified Dutch auction tender offer to purchase shares of its common stock for up to USD 33.00 apiece for a total price of USD 75.00 million.
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