Rocky Gap Casino Resort in Maryland was successfully sold, according to Golden Entertainment Inc., a well-known owner and operator of slot machines, casinos, and bars in Las Vegas. Subject to typical equity capital adjustments, the sale was completed for an anticipated $260 million total cash consideration.
According to the acquisition agreements, Colorado-based gambling corporation Century Casinos, Inc. would pay around $56.1 million to buy the Rocky Gap operation, subject to standard working capital adjustments. On the other side, New York-based VICI Properties Inc. paid about $203.9 million for an interest in the structures and land associated with Rocky Gap. Additionally, a sizeable chunk of the sale proceeds, around $175 million, will be used to pay down outstanding term debts.
Strategic Reasons and Investment Potential
The purchase of Rocky Gap Casino Resort by Century Casinos offers both strategic advantages and expansion possibilities. The business has the opportunity to grow Rocky Gap in order to draw additional clients from nearby areas and establish a presence in the Maryland casino sector. The addition of the Rocky Gap property to the triple-net master lease with VICI will result in an initial yearly rent increase of around $15.5 million. Using cash on hand and a $30 million loan from a revolving credit agreement with Goldman Sachs, Century Casinos paid for the acquisition. Erwin Haitzmann and Peter Hoetzinger, the co-CEOs of Century Casinos, expressed their excitement for the purchase and said that “Rocky Gap is a great addition to our portfolio for expanding into Maryland.”
The Rocky Gap Casino Resort is a desirable investment because of its position in Rocky Gap State Park in Flintstone. The resort’s 270-acre grounds, which include a 196-room hotel, conference rooms, an event center, an 18-hole golf course, and a spa created by Jack Nicklaus, draw nearly 500,000 people a year. The casino itself is 25,000 square feet in size and has 630 slot machines in addition to 16 table games. The resort just had a $10 million refurbishment project that improved its sports club, hotel, restaurants, and slot machines.
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