Earlier today, it was announced that Maryland-based gaming company Lakes Entertainment Inc. and Nevada casino operator Golden Gaming, LLC have reached an agreement for the establishment of a new casino company, which will be called Golden Entertainment Inc.
The two business entities are expected to close the deal before the end of 2015. According to the information that was released so far, Lakes Entertainment was valued at a price of $9.57 per share or a 37% premium to its closing price on Friday.
The company pointed out that its shareholders will retain possession of 64.3% of the total shares once the merger is complete.
Blake L. Sartini, who is currently taking the position of a chief executive officer at Golden Gaming, is to be appointed as the new company’s CEO and chairman. As for Lyle Berman, Lakes Entertainment’s chairman and chief executive, he will remain a member of the board and a consultant.
It was also announced that Tim Cope, the Maryland-based gaming operator’s chief financial officer and president, will also be a board member of the new company as well as its consultant.
Mr. Berman stated that he was particularly happy about this merger and the opportunity to work with Golden Gaming. He said that Lakes Entertainment’s strong balance sheet, Golden Gaming’s thriving gambling venues and “distributed gaming platform” will make the new business entity truly unique.
Mr. Sartini commented on the merger as an excellent opportunity for Golden Gaming to significantly expand its operations outside Nevada. He pointed out that the company is currently holding the biggest market share in distributed gaming and tavern operations across the state. What is more, its Nye County casino resorts have also been quite successful recently.
The new company is expected to offer about 9,250 video lottery terminals and slot machines in both Maryland and Nevada. They are to be located at 4 casino venues, more than 600 route facilities, and a total of 48 taverns.
Experts from Golden Gaming and Lake Entertainment have estimated that the combined net revenues for 2015 will amount to $348.1 million. As for EBITDA, it is expected to reach $42.5 million. Furthermore, operating free cash flow for 2015 will probably total $33.7 million and adjusted net income will mount up to $13.3 million.
As already mentioned, the deal is to be inked by the end of the year. It needs to be approved by regulators and by Lakes Entertainment’s shareholders, since the company’s shares will be issued due to the merger.
