Alliance Gaming Announces Definitive Agreement for Sale of Rail City Casino
December 08 2003 - 7:00AM
PR Newswire (US)
Alliance Gaming Announces Definitive Agreement for Sale of Rail
City Casino LAS VEGAS, Dec. 8 /PRNewswire-FirstCall/ -- Alliance
Gaming Corp. announced today that it has signed a definitive
agreement for the sale of 100% of the stock of Rail City Casino
located in Sparks, Nev., to The Sands Regent . The total
consideration, based upon a multiple of trailing twelve months
EBITDA, is expected to be approximately $38.0 million, consisting
of $35 million in cash and $3.0 million of subordinated debt
provided by Alliance Gaming. Following normal regulatory review
process, the transaction is expected to close in the first half of
2004. "The sale of Rail City is consistent with our strategy of
divesting non- core assets when both the timing and the selling
price multiple line up to provide a very attractive deal for both
parties," said Robert Saxton, Sr. Vice President and Chief
Financial Officer of Alliance Gaming. "Rail City has been a
remarkably productive property for us and the decision to sell it
has been a difficult one. The Sands Regent in-depth knowledge and
experience in the Reno-area market, we feel, will provide Rail City
the greatest opportunity to reach its full potential." Alliance
Gaming purchased Rail City in 1990 and the current management team
has guided the property to steady growth and strong profitability
over the past six years even in the face of growing competition
from California Native American casinos. Located just off
Interstate 80 near the Reno-Sparks border, Rail City features a
16,000-square foot casino with 550 gaming machines, live table
games, keno and a sportsbook. The property also features a 250-seat
restaurant and a large lounge area that offers live music and
televised sporting events. "The acquisition of Rail City Casino
makes a powerful statement about The Sands Regent's plans for
future growth while giving us an immediate impact in the Northern
Nevada locals market," said Ferenc B. Szony, President and CEO of
The Sands Regent. "Our previously announced strategy to expand
operations within the Reno-area market is being realized once again
with this agreement. Rail City has the loyal customer base,
convenient location, a great team of employees, and proximity to
our other two properties that we have been looking for in selecting
potential acquisitions." Alliance Gaming announced in July 2003
that it had signed definitive agreements for the sale of its entire
gaming route operations, consisting of Las Vegas-based United Coin
Machine Co. (UCMC) and New Orleans-based Video Services, Inc.
(VSI), as well as its Bally Wulff subsidiary. The Bally Wulff sale
closed in late July 2003 and the route operations sale remains on
schedule to close in early calendar 2004. Alliance Gaming is a
diversified gaming company with headquarters in Las Vegas. The
Company is engaged in the design, manufacture, operation and
distribution of advanced gaming devices and systems worldwide, and
is the nation's largest gaming machine route operator and operates
two casinos. Additional information about the Company can be found
at http://www.alliancegaming.com/ . The Sands Regent owns and
operates the Sands Regency Casino and Hotel in downtown Reno, Nev.,
and Gold Ranch Casino and RV Resort in Verdi, Nev. The Sands
Regency is an 850-room hotel and casino with 29,000 square feet of
gaming space offering table games, keno, bingo and slot machines.
In addition to complete amenities and on-site brand-name
restaurants, the property also includes a 12,000-square-foot
convention and meeting center which seats close to 1,000 people.
The Gold Ranch Casino and RV Resort is located in Verdi, 12 miles
west of Reno. Gold Ranch offers approximately 300 slot machines in
an 8,000-square foot casino, two restaurants, two bars, a 105-space
RV park, a California lottery station, an ARCO gas station and a
convenience store. This news release may contain "forward-looking"
statements within the meaning of the Securities Act of 1933, as
amended, and is subject to the safe harbor created thereby. Such
information involves important risks and uncertainties that could
significantly affect the results in the future and, accordingly,
such results may differ from those expressed in any forward-
looking statements. Future operating results may be adversely
affected as a result of a number of risks that are detailed from
time to time in the company's filings with the Securities and
Exchange Commission. For further information, please contact:
investors and media, Robert L. Saxton of Alliance Gaming,
+1-702-270-7600. DATASOURCE: Alliance Gaming Corp. CONTACT:
investors and media, Robert L. Saxton of Alliance Gaming,
+1-702-270-7600 Web site: http://www.alliancegaming.com/
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