Century Casinos has detailed a definitive agreement that will see the group purchase 50 per cent of Smooth Bourbon as well as Nevada’s Nugget Casino Resort from Marnell Gaming for $195m.
Furthermore, the casino and entertainment operator will also retain a five-year option to purchase the remaining 50 per cent of the Marnell Gaming subsidiary for $105m, plus two per cent per annum.
Century anticipates acquiring its 50 per cent interest for $95m, which represents a cap rate of 7.9 per cent based on 2021 preliminaries, during the early stages of 2022.
Smooth Bourbon owns the land and building underlying the Nugget gaming establishment, and will enter into a lease agreement for $15m of annual rent.
Furthermore, following required approvals from the Nevada Gaming Commission, the company anticipates that its $100m Nugget resort purchase will be undertaken within one year of the former.
“We have been looking at entering the Reno market 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,” explained Erwin Haitzmann and Peter Hoetzinger, Co-Chief Executive Officers of Century Casinos.
“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. We expect the Nugget to seamlessly integrate and provide added synergies for Century Casinos’ US portfolio.”
Nugget Casino Resort, located in Sparks, Nevada, had net operating revenue of $100.4m and adjusted EBITDA of $32.8m, based on preliminary results for the year ended December 31, 2021.
The property includes a gaming floor that boasts 859 slot machines and 29 table games, as well as 1,382 hotel rooms, 8,555 seat outdoor amphitheater, and seven dining venues.
Upon closing of the acquisition, Century’s North American portfolio will increase to ten casinos that include 6,700 gaming machines and 140 table games. On a pro-forma basis, the company expects to generate 94 per cent of its adjusted EBITDA from its North American casinos.
