COLORADO SPRINGS, Colo.,
June 17, 2019 /CNW/ -- Century
Casinos, Inc. (Nasdaq Capital Market®: CNTY) ("Century Casinos" or
"the Company"), announced today that it has entered into a
definitive agreement to acquire the operations of Isle Casino Cape
Girardeau ("Cape Girardeau"), Lady
Luck Caruthersville ("Caruthersville") and Mountaineer Casino,
Racetrack and Resort ("Mountaineer") from Eldorado Resorts, Inc.
(Nasdaq Capital Market®: ERI) ("Eldorado Resorts") for
approximately $107.0 million.
Simultaneous with the closing of the transaction, VICI
Properties Inc. (NYSE: VICI) ("VICI") will acquire the real estate
assets of the three properties for approximately $278.0 million and the Company will enter into a
triple net lease agreement with VICI for the three casino
properties. The lease will have an initial annual rent of
approximately $25.0 million and an
initial term of 15 years, with four five-year renewal options. The
pro-forma rent coverage ratio at the acquired portfolio level is
2.1x.
The purchase price represents an implied trailing twelve month
pro-forma earnings before interest, taxes, depreciation and
amortization ("EBITDA") multiple of 4.1x for the three casinos. The
multiple excludes any potential cost synergies and operational
improvements. The acquisition is expected to meaningfully enhance
the Company's free cash flow as well as be immediately accretive to
earnings.
The Company will finance the $107.0
million purchase with a new credit facility that is
anticipated to be issued by Macquarie Capital. On a pro-forma
basis, the Company estimates this will result in total leverage of
3.5x and net leverage of 2.2x. The Company expects to quickly
delever given the growth across its existing portfolio, newly
acquired properties and the ramp up of Century Mile Racetrack and
Casino.
"This transaction further highlights our commitment to enhancing
shareholder value," Erwin Haitzmann, Co-Chief Executive Officer of
Century Casinos remarked. "Cape
Girardeau, Caruthersville
and Mountaineer expand the strategic diversity of Century Casinos
with attractive assets in strong, stable markets. The expected
increase to our free cash flow will allow us to remain well
positioned to reduce leverage and evaluate additional strategic
growth opportunities," Haitzmann concluded.
"The acquisition of the operations of Cape Girardeau, Caruthersville and Mountaineer will transform
Century Casinos into a premier regional casino operator in
North America," Peter Hoetzinger,
Co-Chief Executive Officer of Century Casinos remarked. "We believe
these assets are a great fit for our portfolio and will
complement Century Casinos' expertise in operating small to
mid-sized casinos. We are pleased to partner with VICI Properties
to structure this transaction in a manner that we expect will be
immediately accretive to our operating results," Hoetzinger
concluded.
Isle Casino Cape Girardeau is located in Cape Girardeau, Missouri, approximately 120
miles south of St. Louis,
Missouri, overlooking the Mississippi river. The property
opened in 2012 and consists of a dockside casino featuring 41,500
square feet of casino space, 863 gaming machines, 20 table games,
three dining venues, a pavilion and an entertainment center. The
property also includes a wide variety of non-gaming amenities,
including an events center.
Lady Luck Caruthersville is a riverboat casino located along the
Mississippi river in Caruthersville,
Missouri. The property opened in 1995 and consists of a
dockside casino featuring 21,000 square feet of casino space, 507
slot machines, nine table games, two dining venues, a 40,000 square
foot pavilion and a 28-space RV park.
Mountaineer Casino, Racetrack and Resort is a hotel, casino,
entertainment and live thoroughbred horse racing facility located
in New Cumberland, West Virginia,
one hour from downtown Pittsburgh,
Pennsylvania. The property originally opened in 1951 with
the casino opening in 1994 and features a 357-room hotel,
approximately 1,486 slot machines, 36 table games, a poker room, a
racetrack and five dining venues.
Upon closing this transaction, the Company's portfolio will
increase to 10 casinos in North
America that include over 6,700 gaming machines and 150
table games. On a pro-forma trailing twelve-month basis the Company
expects to generate 96% of its Adjusted EBITDA* before rent from
its North American casinos.
The transaction, which is expected to close in early 2020, is
subject to antitrust approval and approvals of the Missouri Gaming
Commission and the West Virginia Lottery as well as other customary
closing conditions.
Stifel is acting as exclusive financial advisor and Faegre Baker
Daniels LLP is acting as legal counsel to the Company in connection
with the transaction.
Conference Call Information
Today the Company will
post a presentation on the transaction on its website at
https://www.cnty.com/investor/presentations/.
The Company will also host a call about the transaction,
Monday, June 17th at
9:00 am EDT; 7:00 am MDT, respectively. US domestic
participants should dial 844-244-9160. For all international
participants, please use 330-931-4670 to dial in. Participants may
listen to the call live at
https://centurycasinos.adobeconnect.com/earningsrelease or
obtain a recording of the call on the Company's website until
July 31, 2019 at
https://www.cnty.com/investor/presentations/.
Supplemental Information:
The Company defines
Adjusted EBITDA as net earnings (loss) attributable to
Century Casinos, Inc. shareholders before interest expense
(income), net, income taxes (benefit), depreciation, amortization,
non-controlling interest net earnings (loss) and transactions,
pre-opening expenses, acquisition costs, non-cash stock-based
compensation charges, asset impairment costs, (gain) loss on
disposition of fixed assets, discontinued operations, (gain) loss
on foreign currency transactions and other, gain on business
combination and certain other one-time items, such as acquisition
and disposition costs and gain or loss. Intercompany transactions
consisting primarily of management and royalty fees and interest,
along with their related tax effects, are excluded from the
presentation of net earnings (loss) and Adjusted EBITDA. Not all of
the aforementioned items occur in each reporting period, but have
been included in the definition based on historical activity. These
adjustments have no effect on the consolidated results as reported
under the generally accepted accounting principles in the United States ("GAAP"). Adjusted EBITDA is
not considered a measure of performance recognized under GAAP.
Management believes that Adjusted EBITDA is a valuable measure of
the relative performance of the Company and its properties. The
gaming industry commonly uses Adjusted EBITDA as a method of
arriving at the economic value of a casino operation. Management
uses Adjusted EBITDA to compare the relative operating performance
of separate operating units by eliminating the above-mentioned
items associated with the varying levels of capital expenditures
for infrastructure required to generate revenue and the often high
cost of acquiring existing operations. Adjusted EBITDA is used by
the Company's lending institution to gauge operating performance.
The Company's computation of Adjusted EBITDA may be different from,
and therefore may not be comparable to, similar measures used by
other companies within the gaming industry.
About Century Casinos, Inc.:
Century Casinos, Inc. is
an international casino entertainment company that operates
worldwide. The Company owns and operates Century Casino &
Hotels in Cripple Creek and
Central City, Colorado, and in
Edmonton, Alberta, Canada; the
Century Casino in Calgary and
St. Albert, Alberta, Canada and in
Bath, England; and the Century
Mile Racetrack and Casino ("CMR") in Edmonton, Alberta, Canada. Through its
Austrian subsidiary, Century Resorts Management GmbH ("CRM"), the
Company holds a 66.6% ownership interest in Casinos Poland Ltd.,
the operator of seven casinos throughout Poland; and, a 75% ownership interest in
each of Century Downs Racetrack and Casino in Calgary,
Alberta, Canada and Century Bets!
Inc. ("CBS"). CBS and CMR operate the pari-mutuel off-track horse
betting networks in southern and northern Alberta, respectively. The Company operates
six ship-based casinos under agreements with two cruise ship
owners. The Company, through CRM, also owns a 7.5% interest in, and
provides consulting services to, Mendoza Central Entretenimientos
S.A., a company that provides gaming-related services to Casino de
Mendoza in Mendoza, Argentina. The Company continues to pursue
other international projects in various stages of development.
Century Casinos' common stock trades on The Nasdaq Capital
Market® under the symbol CNTY. For more information about Century
Casinos, visit our website at www.cnty.com.
This release may contain certain "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as
amended, Section 21E of the Securities Exchange Act of 1934, as
amended, and the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by words such as
"expect," "anticipate," "believe," "intend," "estimate," "plan,"
"target," "goal," or similar expressions, or future or conditional
verbs such as "will," "may," "might," "should," "would," "could,"
or similar variations. These statements are based on the beliefs
and assumptions of the management of Century Casinos based on
information currently available to management. Such forward-looking
statements include, but are not limited to, certain plans,
expectations, goals, projections, and statements about the benefits
of the transaction, as well as Century Casinos' plans, objectives,
expectations, intentions, and other statements relating to cash
flow and operating results, a new credit facility and debt
repayment. Such forward-looking statements are subject to risks,
uncertainties and other factors that could cause actual results to
differ materially from future results expressed or implied by such
forward-looking statements.
While there is no assurance that any list of risks and
uncertainties or risk factors is complete, below are certain
factors which could cause actual results to differ materially from
those contained or implied in the forward-looking statements
including: risks related to the acquisition of the three assets and
the integration of the businesses and assets acquired; the
possibility that the transaction does not close when expected or at
all because required regulatory or other approvals are not received
or other conditions to closing are not satisfied on a timeline
basis or at all; potential adverse reactions or changes to business
or employee relationships, including those resulting from the
completion of the transaction; the possibility that the anticipated
operating results and other benefits of the transaction are not
realized when expected or at all; local risks including proximate
competition, potential competition, legislative risks, and local
relationships; risks associated with increased leverage from the
transaction; and other risks described in the section entitled
"Risk Factors" under Item 1A in the Company's Annual Report on Form
10-K for the year-ended December 31,
2018 and in subsequent periodic and current SEC filings the
Company may make. Century Casinos disclaims
any obligation to revise or update any forward-looking
statement that may be made from time to time by it or on its
behalf.
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SOURCE Century Casinos, Inc.