Las Vegas-based casino operator Golden Entertainment, Inc. announced Monday it acquired two casinos in Laughlin, giving the company three properties in the Southern Nevada community along the Colorado River.
Golden will pay between $168 million and $190 million to acquire the Edgewater Hotel & Casino Resort and the Colorado Belle Hotel & Casino Resort from Marnell Gaming, LLC.
The purchase consideration will initially consist of $155 million in cash. The balance will be made up of restricted Golden stock, issued at a price of $28.54 per share.
The purchase price will be based on a cash flow multiple over the last 12 months ending in November 2018. The transaction is expected to close in 2019.
The transaction will make Golden Entertainment Laughlin’s largest casino operator. The city is roughly 90 miles south of Las Vegas. Through the first 11 months of the fiscal year, Laughlin gaming revenues are up 4.86 percent.
“The acquisition … provides us with an exciting opportunity to expand our portfolio to nine wholly-owned casino resorts in Southern Nevada, solidifying our presence in this growing and attractive gaming market,” Golden Chairman and CEO Blake Sartini said in a statement. “The transaction is consistent with our strategy to grow our business in an accretive manner for shareholders… Golden is uniquely positioned to benefit immediately from cost synergies related to the acquisition of these properties.”
Jefferies gaming analyst David Katz said in a note to investors that the transaction was positive for the company “and part of what we expect to be a broader growth strategy.”
In a statement, Golden said it expects the acquisition to be cash flow positive and immediately accretive to operating results. The transaction will be financed with incremental debt under Golden’s credit facility and with cash on hand.
Collectively, Edgewater and Colorado Belle have more than 1,400 slot machines, 40 table games and 2,150 hotel rooms. The properties also feature 11 restaurants and dedicated entertainment venues including the Laughlin Event Center, a 12,000-seat outdoor arena that hosts concerts and other events throughout the year.
The two properties are adjacent to Golden’s Aquarius Casino Resort, which features more than 1,200 slot machines, 30 table games and almost 2,000 hotel rooms. When combined, these three properties will be situated on 55 contiguous acres along the heart of the Laughlin Riverwalk.
Through the transaction, Marnell Gaming CEO Anthony Marnell III will become a Golden Entertainment shareholder. Marnell built the M Resort in Las Vegas, which is now owned by Penn National Gaming. Marnell owns the Nugget Hotel-Casino in Sparks, Nev., near Reno.
“The Marnell family has a long history in the gaming industry,” Sartini said. “Over the past several years, Marnell Gaming has taken their expertise and created a significant hotel, casino and entertainment presence in Laughlin, and we are excited to build on these well positioned properties.”
Golden shares closed at $31.28 on the NASDAQ National Market Monday, up $1.93 or 6.58 percent following news of the transaction.
