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Fertitta amends SPAC merger terms ahead of listing


Fertitta Entertainment has amended the terms of its merger with a special purpose acquisition company (SPAC), reportedly increasing the enterprise value of the combined entity by $2bn ahead of listing on the New York Stock Exchange.

Fertitta Entertainment, the parent company of Golden Nugget operator Landry’s, announced in February that it would merge with Fast Acquisition Corporation, with Tilman Fertitta selling a minority stake in the business and retaining a 60% shareholding.

However, the terms of the deal have been updated, with Fertitta Entertainment now set to add “42 incremental, high-quality business assets” to the public company, including a range of restaurants, such as the Mastro’s brand, and other entertainment venues. As part of the transaction, the company will also become the full owner of the Catch restaurants chain.

As a result of the amendment, Tilman Fertitta will now retain a 72% shareholding after the transaction closes.

Fertitta Entertainment said that the combined entity will be valued at $8.6bn following the addition of the new business assets, with Bloomberg having reported that the previous value had been tagged at $6.6bn.

With boardroom approval having already been granted, Fertitta Entertainment said that the transaction is expected to close in the fourth quarter of this year following the conclusion of regulatory, stockholder and gaming approval processes.

The merger and flotation will lead to the creation of one of North America’s largest publicly-traded hospitality companies, with control of five land-based casinos and substantial ownership of Golden Nugget Online Gaming, among other assets.

“The contribution of the new business assets greatly improves the company’s operating cash flow, provides better assets for organic growth, and significantly deleverages the company as no incremental debt is being incurred by the company as part of the revised transaction,” said Tilman Fertitta, who took the company private in 2010 and will remain chairman, president and chief executive.

Fertitta Entertainment added that pro forma net revenues for the second quarter of 2021 would reach between $917m and $920m, with adjusted earnings before deductions (EBITDA) estimated to be between $270m and $275m.

Pro forma adjusted EBITDA is expected to exceed $800m for the full year if the SPAC transaction progresses as planned.

“Since the rollout of covid vaccinations, the operating results of the incremental assets have been so strong, I decided that I should be focused all in on the company as I see opportunities for a significant acquisition that would not otherwise be available to the company without this revised transaction,” Tilman Fertitta added.

FAST chief executive Sandy Beall added: “We believe the new assets provide tremendous value to the public company and greatly strengthen the balance sheet for future growth.”