Eldorado completes tropicana acquisition in latest… - BakariBiz

Eldorado completes tropicana acquisition in latest…

Eldorado completes tropicana acquisition in latest…

Nevada-based Eldorado Resorts, Inc. has completed the previously announced acquisition of fellow gaming and hospitality business Tropicana Entertainment Inc.

in a deal valued at around $1.85 billion.
The transaction comes as the latest in a flurry of merger and acquisition deals to have taken place within the US land-based casino space over the past several years amid concerns over growing competition in the field and at a time when casinos are striving to attract a younger generation of customers to replace its current aging clientèle.

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Under the terms of the recently completed deal, a subsidiary of Eldorado has merged into Tropicana and the latter has become a wholly owned subsidiary of Eldorado. Shortly before the above-mentioned merger, Gaming and Leisure Properties, Inc. (GLPI), a REIT specializing in casino properties, had purchased all of Tropicana’s real estate but MontBleu Casino Resort & Spa and Lumière Place Casino and Hotel. GLPI had paid the amount of $964 million to acquire the properties, while Eldorado had agreed to cover the rest of the purchase price.

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In addition to the above transaction, Eldorado has entered into a 15-year master lease agreement with GLPI, under which the latter has agreed to lease the Tropicana real estate to the Reno, Nevada-based gaming and hospitality company.
Eldorado is thus assuming control over seven casinos in six states, including Nevada, Indiana, Louisiana, Mississippi, Missouri, and New Jersey. The company is adding 7,900 slot machines and 265 table games to extend its existing portfolio to more than 27,500 slot machines and other gaming devices, and 800 table games. Eldorado is also expanding its presence across two new states and adding 5,400 hotel rooms to now operate more than 12,500 hotel rooms.

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The deal is creating a major land-based casino operation with combined annual revenue of over $2.7 billion and adjusted EBITDA of nearly $700 million. Eldorado expects to realize cost synergies of $40 million during the first year of operation of Tropicana’s real estate.

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Eldorado’s Other Recent Deals
It has been an eventful year for Eldorado as it has completed several more important deals in addition to the Tropicana acquisition. Most recently, the company announced a partnership with British bookmaker William Hill that would allow it to capitalize on the newly liberalized US sports wagering market.

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Under the deal, William Hill will become Eldorado’s exclusive partner for the provision of sports betting and online gambling services across its 26 properties in 13 states. Here it is important to note that the two companies have been working together for more than six years now, but have decided to extend their partnership to better position themselves in the newly formed US sports betting field following the US Supreme Court’s ruling in May that struck down a long-standing ban on wagering on professional and college sporting events.

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Eldorado has also earlier this year entered into a partnership with its fellow gaming and hospitality developer and operator, The Cordish Companies, to jointly develop and operate a mixed-use entertainment complex in Pompano, Florida. The new property will be adjacent to and will complement the existing Isle Casino Racing Pompano Park. It will feature a hotel, a corporate office campus, and a residential portion as well as retail, dining, and entertainment facilities.

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