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JPMorgan Chase, Credit Suisse support Golden Entertainment acquisition of American Casino & Entertainment Properties

From ABL Advisor

Golden Entertainment Inc. announced that it completed its previously announced acquisition of American Casino & Entertainment Properties LLC, for $850 million from Whitehall Street Real Estate Partners 2007 in a cash and stock transaction.

The acquisition of American Casino & Entertainment Properties LLC brings to Golden Entertainment three properties in Las Vegas including the Stratosphere Casino, Hotel & Tower, Arizona Charlie’s Decatur and Arizona Charlie’s Boulder, as well as the Aquarius Casino Resort in Laughlin. These properties expand and strengthen Golden’s presence in Nevada and the Las Vegas Locals market, while providing the Company with an iconic Las Vegas destination property. Golden now operates 16,000 slot machines, 114 table games and 5,162 hotel rooms across eight casino properties and almost 1,000 distributed gaming locations including the largest branded tavern portfolio in Nevada.

The purchase consideration consisted of $781 million cash and approximately four million shares of Golden Entertainment common stock. Golden financed the cash portion of the transaction and refinanced its existing credit facilities with a new $800 million 1st Lien Term Loan and a $200 million 2nd Lien Term Loan, as well as obtained a new $100 million senior secured revolving credit facility to support the Company’s future organic and strategic growth initiatives.

According to a regulatory filing with the SEC, the company entered into credit agreements with respect to a $900.0 million senior secured first lien credit facility (consisting of $800.0 million in term loans and a $100.0 million revolving credit facility) with JPMorgan Chase Bank, N.A. as administrative agent and collateral agent, and a $200.0 million senior secured second lien term loan facility with Credit Suisse AG, Cayman Islands Branch (as administrative agent and collateral agent), the lenders party thereto and the other parties party thereto. The term loans under both Credit Facilities were fully drawn at closing; the revolving credit facility under the First Lien Facility was undrawn at closing. Proceeds from the term loan borrowings under the Credit Facilities at the closing were used primarily to fund the cash purchase price in the American Acquisition (a portion of which was used to repay American’s existing senior secured indebtedness), to refinance the company’s outstanding senior secured indebtedness under the Former Credit Agreement, and to pay certain transaction fees and expenses.

Blake L. Sartini, Chairman and Chief Executive Officer of Golden Entertainment, commented, “This acquisition of four leading Southern Nevada properties significantly increases our operational scale and perfectly complements our existing operations. Our new properties and existing businesses are well positioned to grow as they benefit from Nevada’s continued economic strength, particularly in the Las Vegas market. In addition, we have the ability to develop approximately 15 acres of excess real estate surrounding the Stratosphere, which we believe has enormous long-term potential. We look forward to quickly integrating the American operations and welcoming their guests and team members to the Golden family.”

Charles Protell, Chief Financial Officer of Golden, added, “The addition of the American properties to our portfolio firmly establishes Golden as a leading Nevada-focused regional gaming company with expected 2017 pro forma net revenues and adjusted EBITDA of $847 million and $180 million, respectively, which includes $18 million of estimated run-rate synergies. We believe that our expanded asset base, strong operating discipline and ability to quickly realize synergies will result in increased free cash flow, allowing us to reduce leverage as well as reinvest in our existing businesses and new growth opportunities.”

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IMAGE: Golden logo


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