On February 23 Century Casinos, Inc. ($CNTY) announced that it was buying the Nugget Casino Resort as well as a 50 percent stake in Smooth Bourbon, LLC, from Marnell Gaming for $195 million. Century Casinos can also enter into a five-year option to purchase the remainder of Smooth Bourbon for $105 million.
Smooth Bourbon owns the land and building that the Nugget resides on, and Goldman Sachs Banks USA issued a commitment letter to Century Casinos in the amount of $350 million of secured term loan financing to support the acquisition. The transaction is expected to close in the second quarter of this year.
“We have been looking at entering theRenomarket for a long time, and we believe the Nugget is a perfect fit for our portfolio. We look forward to welcoming the great team at the Nugget to Century Casinos,” Century Casinos Co-Chief Executive Officers Erwin Haitzmann and Peter Hoetzinger stated in a press release. “We believe there is a lot of upside to this transaction and t we identified some areas of improvement to continue the Nugget’s growth. We expect the Nugget to seamlessly integrate and provide added synergies for Century Casinos’ U.S. portfolio,” they added.
The Nugget features 1,382 hotel rooms, seven restaurants, more than 100,000 square feet of convention space, an 8,555-seat outdoor amphitheater, and roughly 2400 parking spaces on its property. Its 50,200 square feet of casino space includes 859 slot machines and 29 table games. As of December 31, 2021, the Nugget had a net operating revenue of $100.4 million and Adjusted EBITDA of $32.8 million.
Marnell Gaming bought the Nugget back in February of 2016 and renovated its convention center, remodeled its hotel rooms, and initiated the development of the outdoor event amphitheater in Victorian Square. Details of that transaction were not disclosed and no one from Marnell Gaming could be reached for comment regarding its decision to sell the Nugget after only six years of ownership.
Century Casinos own 11 other gaming establishments within the United States, including the Century Downs Racetrack in Alberta, Canada, as well as a casino in Warsaw, Poland. At the time of Century Casinos’ announcement, its stock price rose 13 percent on NASDAQ. As of February 28, at 2 p.m. PST, Century Casinos stock was listed at $12.30 per share.
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As an enthusiast in the field of finance, mergers and acquisitions, and the gaming and entertainment industry, I possess a comprehensive understanding of corporate transactions, financial markets, and the dynamics of casino operations. My knowledge encompasses a range of areas including corporate finance, market analysis, and business strategy, allowing me to delve into the intricacies of the recent acquisition involving Century Casinos, Inc. ($CNTY) and its purchase of the Nugget Casino Resort and a stake in Smooth Bourbon, LLC.
The article published on March 5, 2022, discusses Century Casinos' acquisition of the Nugget Casino Resort and its 50 percent stake in Smooth Bourbon, LLC, from Marnell Gaming for $195 million, along with an option to acquire the remaining stake in Smooth Bourbon for an additional $105 million within a five-year period.
Key points highlighted in the article:
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Acquisition Details: Century Casinos' acquisition involves the purchase of the Nugget Casino Resort and a significant stake in Smooth Bourbon, which owns the land and building housing the Nugget.
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Financing: Goldman Sachs Banks USA issued a commitment letter of $350 million of secured term loan financing to Century Casinos to facilitate the acquisition.
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Expected Closing: The transaction is projected to conclude in the second quarter of the same year.
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Strategic Fit: Century Casinos' CEOs, Erwin Haitzmann and Peter Hoetzinger, expressed their confidence in the acquisition, citing the Nugget as an ideal addition to their portfolio, emphasizing opportunities for growth and synergies within their U.S. operations.
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Nugget Casino Resort Overview: The Nugget Casino Resort boasts extensive facilities, including 1,382 hotel rooms, seven restaurants, over 100,000 square feet of convention space, an outdoor amphitheater with 8,555 seats, and a substantial casino area equipped with 859 slot machines and 29 table games.
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Financial Performance: As of December 31, 2021, the Nugget reported a net operating revenue of $100.4 million and an Adjusted EBITDA of $32.8 million.
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Marnell Gaming's Previous Ownership: Marnell Gaming acquired the Nugget in February 2016, undertook renovations, and started the development of an outdoor event amphitheater but has decided to sell after six years, with reasons undisclosed.
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Century Casinos' Portfolio: The company owns multiple gaming establishments across the U.S., Canada (including the Century Downs Racetrack), and Poland, with the acquisition positively impacting its stock price, which rose by 13 percent on NASDAQ following the announcement.
The transaction signifies Century Casinos' strategic expansion into the Reno market, aiming to leverage the Nugget's amenities and revenue potential while integrating it into their existing portfolio for further growth and operational synergies. This move underlines Century Casinos' proactive approach to capitalize on opportunities in the gaming and hospitality sector, strengthening its market presence.
