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Friday, March 31, 2023

Century Casinos (NASDAQ: CNTY) Announces Acquisition of Nugget Casino Resort

Century Casinos, Inc. (NASDAQ: CNTY) confirmed that it has inked an agreement to buy 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 agreement has also provided a five-year option to buy the remaining 50% of PropCo for $105 million-plus 2% per annum.

The Nugget Casino Resort is situated in Sparks, Nevada, and is easily accessible from Reno-Tahoe International Airport via Interstate 80. The full-service resort features a large gaming floor, two hotel towers, 110,000 square feet of convention space. It also includes an outdoor amphitheater with seating for 8,555 people, a wide range of casual and fine places to eat, many on bars and lounge area, plus a 5-story 1,200-space parking garage with an extra 1,272 parking spaces.

Furthermore, the Company’s North American business will grow to ten casinos with 6,700 gaming machines and 140 table games after the OpCo transaction is completed. The company anticipated its North American casinos to contribute 94 percent of its Adjusted EBITDA on a Pro-forma basis.

Transaction Details

As per the preliminary 2021 statistics, the company will pay $95 million for its 50% stake in PropCo. It represents a capitalization rate of 7.9%. PropCo will lease the Nugget’s land and building to OpCo for $15 million per year. Following necessary Nevada Gaming Commission approvals, the company will buy 100% of OpCo for $100 million.

In addition, Goldman Sachs Bank USA has submitted a confirmation letter for $350 million in senior secured term loan financing, refinancing Century Casinos’ current loans, and general business purposes, as well as a $30 million senior secured revolving credit facility, about the purchase.

The PropCo deal and financing are likely to finalize in the Q2 of 2022. On the other hand, the OpCo acquisition is scheduled to close within a year after the PropCo transaction, contingent upon necessary Nevada Gaming Commission clearances. Both transactions are conditional to the usual closing conditions.

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