Colorado-based Century Casinos said Wednesday it was selling Century Casino Calgary to 2267166 Alberta for $7.5 million (10 million in Canadian dollars), plus a three-year quarterly earn-out as specified in the agreement.
In a statement, Century said the $7.5 million was non-refundable. Century, through a subsidiary, will continue to operate the sports bar, bowling, and entertainment at the property, and to own the real estate.
The lease agreement will have an annual net rent of approximately $358,102 and a term of three years. The transaction is expected to close in the fall and is subject to approval by the Alberta Gaming, Liquor, and Cannabis Commission.
“This transaction immediately strengthens our balance sheet,” said Erwin Haitzmann and Peter Hoetzinger, Co-Chief Executive Officers of Century Casinos. “The Calgary casino is one of our smaller operations, contributing $8.4 million in net operating revenue and $1.2 million in adjusted cash flow.”
Union Gaming Group analyst John DeCree had a positive view of the transaction.
“The Calgary divestiture highlights the value of the Canadian portfolio, which is often underappreciated, provides additional liquidity for insurance against any future economic lockdowns, and results in virtually no change to Century’s cash flow outlook,” DeCree said. “In fact, depending on the earn-out performance, Century could see higher cash flow from the asset going forward than it did in 2019.”
