Century Casinos to Acquire Nugget Casino Resort in Nevada, For Up To USD$300M
Casino entertainment company Century Casinos, Inc. (Nasdaq Capital Market®: CNTY) is to acquire the operations of Nugget Sparks, LLC, dba Nugget Casino Resort, in Nevada and a 50% stake in Smooth Bourbon, LLC, the business that owns its property.
The Nugget Casino Resort, located in Sparks, Nevada, includes a large gaming floor, two hotel towers, 110,000 square feet of convention space, a 8,555 seat outdoor amphitheater, a wide variety of casual and fine dining options in addition to several on-site bars and lounges, and a 5-story 1,200 space parking garage and additional 1,272 parking spaces. The property consists of 50,200 square feet of casino space, 859 slot machines, 29 table games, 1,382 hotel rooms and seven dining venues.
The resort had net operating revenue of $100.4m and EBITDA of $32.8m based on preliminary results for the year ended December 31, 2021.
Generally speaking, physical venues have to compete with online sites. According to the last figures, the global online gambling market is anticipated to be valued at more than 92.9 billion U.S. dollars in 2023. The current size of the market is almost 59 billion U.S. dollars, meaning the size is forecast to double in the upcoming years.
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The Reno-Sparks area is popular for casinos and is also known as a destination for outdoor recreation near Lake Tahoe and ski resorts. The area has also attracted well known tech and manufacturing companies including Tesla, Google, Amazon, Switch,and Apple. In the latests years, the economy is diversifying into entrepreneurial startups, healthcare, and tech-based industries.
Century acquired the two companies from Marnell Gaming, LLC, for $195m. In details,
- following required approvals from the Nevada Gaming Commission, the company will purchase 100% of Nugget Casino Resort, for $100m, and
- the 50% interest in Smooth Bourbon, which owns the land and building underlying the Nugget, will be acquired for $95m. It will also enter into a lease of the property to Nugget Casino Resort, for an annual rent of $15m. The company will also have a five-year option to purchase the remaining 50% of PropCo for $105m plus 2% per annum.
In conjunction with the deal, Goldman Sachs Bank USA has provided a commitment for $350m in senior secured term loan financing to support it, to refinance Century Casinos’ existing debt and for general corporate purposes, and a $30m senior secured revolving credit facility.
The Smooth Bourbon’s transaction and the financing are expected to close early in the second quarter of 2022. The Nugget Casino Resort acquisition is expected to close within one year after the Smooth Bourbon transaction, subject to required approvals of the Nevada Gaming Commission. Closing of both transactions is subject to customary closing conditions.
Led by Erwin Haitzmann and Peter Hoetzinger, Co-Chief Executive Officers, Century Casinos is a casino entertainment company, which owns and operates Century Casino & Hotels in Cripple Creek and Central City, Colorado, and in Edmonton, Alberta, Canada; the Century Casino in Cape Girardeau and Caruthersville, Missouri, and in St. Albert, Alberta, Canada; Mountaineer Casino, Racetrack & Resort in New Cumberland, West Virginia; and the Century Mile Racetrack and Casino in Edmonton, Alberta, Canada. Through its Austrian subsidiary, Century Resorts Management GmbH, the company holds a 66.6% ownership interest in Casinos Poland Ltd., the owner and operator of eight casinos throughout Poland; and a 75% ownership interest in Century Downs Racetrack and Casino in Calgary, Alberta, Canada. The company has an agreement to operate two ship-based casinos.
Upon closing of acquisition, the company’s North American portfolio will increase to 10 casinos that include 6,700 gaming machines and 140 table games.