International casino operator Century Casinos has strengthened its US presence with a deal to acquire the operations of three venues from Eldorado Resorts.
The acquisition will see Century take charge of operations at the Missouri-based Isle Casino Cape Girardeau, the Mississippi based riverboat casino Lady Luck Caruthersville, and Pennsylvania’s Mountaineer Casino, Racetrack and Resort.
The purchase price will be approximately $107.0m, representing a 4.1x EBITDA multi for the properties.
Once Century completes the acquisition of the venues’ operations, real estate investment trust VICI Properties, which was spun off from Caesars Entertainment in 2017, will acquire the real estate assets of the properties for around $278.0m.
Century will then enter into a triple net lease agreement for the properties, paying annual rent of $25m. The contract will run for an initial term of 15 years, with four five-year renewal options.
“This transaction further highlights our commitment to enhancing shareholder value,” Century Casinos co-chief executive Erwin Haitzmann commented.
“Cape Girardeau, Caruthersville and Mountaineer expand the strategic diversity of Century Casinos with attractive assets in strong, stable markets,” he said. “The expected increase to our free cash flow will allow us to remain well positioned to reduce leverage and evaluate additional strategic growth opportunities.”
His co-CEO Peter Hoetzinger said the deal would transform Century into “a premier regional casino operator in North America”.
“We believe these assets are a great fit for our portfolio and will complement Century Casinos’ expertise in operating small to mid-sized casinos,” Hoetzinger explained. “We are pleased to partner with VICI Properties to structure this transaction in a manner that we expect will be immediately accretive to our operating results,” Hoetzinger concluded.
The deal, which is subject to regulatory approval, is expected to be completed early in 2020.