Golden Gaming merges with Lakes
Golden Gaming LLC, slot route operator and owner of Reno’s Sierra Gold tavern, announced it is merging with Minneapolis-based Lakes Entertainment Inc.
“The deal took six to seven months, but seemed to be a great strategic fit,” said Blake Sartini, CEO of Golden Gaming, who will be named chairman and CEO of the merged company, Golden Entertainment Inc. “It’s a real opportunity to establish our business in a public vehicle that will allow us more access to efficient capital.”
Lakes Entertainment brings a significant amount of cash to the deal, said Sartini, which the new company will use to upgrade Golden Gaming’s existing properties in Pahrump: the Pahrump Nugget Hotel & Casino, Gold Town Casino and Lakeside Casino & RV Park.
“We have excess acreage at two of the facilities we operate in Pahrump and we anticipate adding amenities and to continue improving those properties,” Sartini said.
Golden Gaming employs 500 people at its Pahrump properties, making it Nye County’s largest employer, according to the company.
Golden Entertainment will also use the cash to expand into other states.
“There are about 70,000 gaming devices in various states around the country that mimic our route style, so we see an opportunity as the largest distributed operator to pursue opportunities out of state.”
Lakes Entertainment also owns the Rocky Gap Casino Resort in Cumberland, Md.
Golden Gaming comprises three lines of business: the Pahrump resorts; its 29-year-old slot route, which operates 7,600 slots in 600 Nevada locations; and 45 Nevada taverns, including PT’s, Sierra Gold and Sean Patrick’s in the south and Sierra Gold and Sierra Junction in the north.
The combined company will operate 9,250 slot machines and video lottery terminals in Nevada and Maryland at four casino properties, 48 taverns and over 600 route locations.
Golden Entertainment will be publicly traded. Under the terms of the agreement, its stock will be valued at $9.57 at the deal’s close, 37 percent higher than it traded on Jan. 23 just before the deal was announced. The merger is expected to close by the end of 2015.
The companies’ estimate that on a combined pro forma basis 2015 annual net revenues, adjusted EBITDA will be $337.4 million and $42.5 million, respectively, including $3.0 million of anticipated cost synergies.
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