Reno-based Eldorado Resorts agreed to sell two regional gaming properties to racetrack operator Churchill Downs in separate deals for a combined $229.5 million, the company announced Wednesday.
The transactions, which are expected to close this year, allows Eldorado to reinvest into many of its remaining 18 casinos spread through 10 states.
The company agreed to sell Presque Isle Downs & Casino, a racetrack property in Erie, Pa., to Churchill Downs for $178.9 million. In a second transaction, Churchill will acquire the Lady Luck Casino in Vicksburg, Miss., for $50.6 million. Both deals are subject to regulatory approvals.
Under terms of the agreement, the Presque Isle transaction will close before the sale of the Lady Luck.
“The sale price represents an attractive multiple of these properties’ trailing 12 months cash flows,” Eldorado Chairman and CEO Gary Carano said in a statement. “We remain fully committed to expanding our platform into growth markets that we believe have the potential for high returns as well as deploying capital toward high return investments in our existing properties.”
Kentucky-based Churchill Downs did not comment on the transaction. The company reports fourth quarter earnings on Thursday and the deal is expected to come up in management comments.
Last year, Eldorado completed a $1.7 billion purchase of regional gaming rival Isle of Capri, which added 12 casino resorts to the company. Lady Luck was one of the casinos Eldorado picked up in the transaction.
In reporting Eldorado’s quarterly earnings on February 22, Carano said the company will continue to focus on its three flagship Reno resorts – Eldorado, Silver Legacy and Circus Circus. Last year, the company upgraded nearly 1,000 hotel rooms and suites, added or redesigned eight restaurants, cafes and bars, created new public spaces and opened a new poker room and sports book.
Eldorado also wants to reinvest in its two casinos in Black Hawk, Colo.
“Our agreements to divest Presque Isle and Lady Luck Vicksburg are consistent with our strategy to maximize returns from our portfolio of regional gaming assets through investments in new properties as well as opportunistic divestitures,” Carano said.
