Century Casinos Seal $195M Acquisition Deal for Nugget Casino Resort
This $195 million deal includes the acquisition of Smooth Bourbon (50%) and Nugget Casino (100%). Marnell Gaming was the initial owner of Nugget Casino. The deal came to a successful end in Sparks, Nevada. Century casinos then have an option to complete acquiring the remaining half of Smooth Bourbon at $105 million. Afterward, they will part with 2% per year.
According to Century Casinos’ administration, they expect to acquire 50% interest for $95 million in the early stages of 2022. This figure represents a 7.9% cap rate, according to 2021 preliminaries.
Smooth Bourbon is the building and land owner where the Nugget Casino is located. Century casinos will sign an agreement to lease with them for $15 million rent annually. Nevada’s Gaming Commission is currently examining this arrangement.
Century anticipates that the $100 million purchase of Nugget Casino will go through a year after the initial purchase. This acquisition will enhance Century Casinos’ flow of free cash. Moreover, it will also be accretive to earnings.
Century Casinos Get Financial Backing
Goldman Sachs Bank USA is backing the acquisition of Smooth Bourbon and Nugget Casino Resort. The bank has made a commitment letter for $350 million available. This money is in senior secured term loan financing.
The bank commits to supporting the acquisition, sorting out pre-existing debts, and handling corporate functions. This will help Century Casinos’ acquisition faster to complete because of the reduced financial burden.
Century Casinos’ Executive Decision
The Century Casino administration has been awaiting entry into the Reno market for a while now. According to Century’s CEOs Erwin Haitzmann and Peter Hoetzinger, the move to purchase Nugget Casino Resort was fueled by the desire to venture into a new market.
Nugget Casino is excellent for Century Casinos’ portfolio. The transaction will bear good fruit since Century identified some areas of improvement to boost Nugget Casino’s growth. According to Century Casinos’ executive officers, they expect Nugget Casino to blend into Century seamlessly. Additionally, Nugget will provide a partnership perfect for Century Casinos’ US portfolio.
Nugget Casino Resort’s Revenue
This casino resort located in Sparks, Nevada, had a net operating revenue of $100.4 million by the end of 2021. The adjusted EBITDA was at $32.8 million according to preliminary results for the year ended 31st December 2021.
Nugget Casino has 859 slot machines and 29 table games. The establishment (resort) also has 1382 hotel rooms, seven restaurants, and an 8555-seat amphitheater. The gaming floor measures a whole 50,200 square feet of casino space.
Nugget Resort also includes two hotel towers. The convention space is 110,000 square feet with several fine dining and casual dining options. On top of that, there is a five-story 1200 parking garage space.
Once Century Casinos gain full acquisition, its North American portfolio will increase to ten casinos. These ten additional casinos include 6700 machines for gaming and 140 table games. Century Casinos further expect to generate 94% of its adjusted EBITDA from their casinos located in North America.