Century Casinos Wednesday announced that it has entered into a definitive agreement to acquire the operations and 50% of the real estate of Nugget Casino Resort in Sparks, Nevada.
The deal will see Century Casinos purchasing 50% of Smooth Bourbon for $95 million, which owns the land and building underlying the Nugget, and 100% of Nugget Sparks, LLC for $100 million, which owns the casino operations, from Marnell Gaming for $195 million, pending regulatory approval. Century Casinos also will also have a five-year option to purchase the remaining 50% of Smooth Bourbon for $105 million, plus 2% per annum. Smooth Bourbon will then lease the property to Nugget Sparks for an annual rent of $15 million.
Smooth Bourbon, LLC was founded in 2017 to acquire the former Bourbon Square Casino in 2017. Smooth Bourbon acquired the land for the Nugget Casino Resort in 2018 when it was transferred from Nugget Sparks for a recorded price of $6.2 million. According to government real estate records, Nugget Sparks appears to have acquired the real estate associated with the Nugget Casino Resort from Wolfhound Holdings for just $29.2 million in 2016. It was previously reported as “undisclosed”.
Century Casinos Co-CEOs Erwin Haitzmann and Peter Hoetzinger said in a joint statement that the company has been looking to enter the Reno market, and that the Nugget property “is a perfect fit for our portfolio.”
“We believe there is a lot of upside to this transaction and that we identified some areas of improvement to continue the Nugget’s growth,” said Haitzmann and Hoetzinger in the joint statement. “We expect the Nugget to seamlessly integrate and provide added synergies for Century Casinos’ US portfolio.”
The acquisition of Nugget Sparks is expected to enhance the Century Casinos’ free cash flow as well as be immediately accretive to earnings. Once closed, the deal will increase Century Casino’s portfolio to 10 casinos.
Goldman Sachs Bank USA has provided a commitment letter for $350 million in senior secured term loan financing to support the acquisition, refinance Century Casinos’ existing debt, for general corporate purposes, and a $30 million senior secured revolving credit facility.
