Rocky Gap owner completes merger with Nevada slots operator
Staff and wire reports|
Aug 03, 2015 at 5:48 PM
The owner of Rocky Gap Casino Resort has completed its merger with a Las Vegas-based slots tavern chain.
Minnesota-based Lakes Entertainment Inc., which owns Rocky Gap, and Sartini Gaming Inc.'s Golden Gaming said Monday that shareholders approved the deal, first announced in January. The announcement valued the merger at $341 million.
The combined company is called Golden Entertainment Inc. and will be headquartered in Las Vegas.
The merger combines Rocky Gap Casino with Sartini's 48 slots taverns, slots route operation and three Pahrump, Nev., casinos. The slots route includes 7,100 machines at 670 stores, travel centers and other locations in Nevada.
Lakes' principal asset is Rocky Gap, the once-troubled state-owned resort it acquired for $6.8 million in 2012. Lakes opened a $35 million casino there in 2013 in an area that once housed the lakeside golf resort's conference center. The casino, which has about 600 slot machines and 17 table games, generated $22.1 million in revenue during the first half of the year.
"With Golden Entertainment, we now have a national, diversified gaming company with strong assets across the country," said Blake L. Sartini, Golden Entertainment's newly appointed president, chairman and CEO.
The Sartini family, which controls Sartini Gaming, is receiving a 35 percent stake in the combined company, whiles Lakes shareholders retain the balance. The deal also refinances the companies' debt with a new $160 million credit facility.
"The combined company's refinanced debt will provide an immediate benefit in company net income and free cash flow," said Lyle Berman, former chairman of Lakes Entertainment, who remains on the combined company's board.
While the deal valued Lakes Entertainment at $9.57 a share, the stock closed Monday at $9.10 a share. Its NASDAQ trading symbol will change from LACO to GDEN starting Tuesday.
Maryland casino regulators approved the merger in June after an investigation of the company and its principals' financial stability, background and experience.