Key Takeaways
Las Vegas-based gaming distributor and casino conglomerate Golden Entertainment is adding to its holdings, the company announced on Monday. Stratosphere owner American Casino and Entertainment is being snapped up by Golden for an $850 million price tag, which includes $781 million on the table in cash, plus four million shares of the new owner s shares back to the seller.
The Stratosphere has a new owner, after Golden Entertainment purchased the property along with three other resorts for $850 million in cash and stock. (Image: Stratosphere/Facebook)Once the deal is completed, Golden Entertainment will own eight casino resorts in total, with the best-known coming in the sale from the Stratosphere, which stands 1,149 feet high at the far north end of the Las Vegas Strip.
Established in Taverns and SupermarketsThe company s other gaming properties are in Pahrump, Nevada and Flintstone, Maryland. Also in Golden s pre-existing portfolio are PT s Entertainment Group and its more than 50 Nevada-based taverns with gaming, as well as the lucrative lock on one of the largest gaming device distribution companies in the US, which brings slot machines to almost 1,000 supermarkets in Nevada and Montana.
Upon completion of the transaction, Golden Entertainment will operate 15,800 slot machines, 114 table games, and over 5,100 hotel rooms in Nevada. Traded on NASDAQ, shares of Golden Entertainment went soaring some 12 percent in early trading on Monday, following news of the acquisition.
You Can Always Go: DowntownThe inclusion of the Stratosphere in Golden Entertainment s acquisition shifts the company from a powerful off-Strip gaming entity into one with a more visible presence in America s best-known gambling city.
The Stratosphere is officially located within the border of the City of Las Vegas, or what most visitors refer to as downtown. That area is presently experiencing a revenue boom, with over the last 12 months. That easily outpaces the Strip, which is up just two percent.
Golden Entertainment says it s looking to capitalize off the Stratosphere s positioning between the Strip s main drag and the bustling downtown area and Fremont Street. In addition to the resort s 80,000 square feet of gaming space and 2,400 hotel rooms, the property comes with some 15 acres of largely undeveloped land.
Given the recent investment activity focused on the north end of the Las Vegas Strip, we see future potential to develop, Golden Entertainment Chairman Blake Sartini said in a press release.
The company clearly sees the move as a lucrative one, and so, apparently, do others. Golden Entertainment has lined up commitments for $1.1 billion in financing to replenish its coffers following the deal, $100 million of which will be in a revolving credit line for future growth, according to Reuters.
tsxspace.com
