CASINO

Eldorado Resorts strikes $1.7b deal for Isle of Capri Casinos

TAGs: Eldorado Resorts, Isle of Capri, isle of capri casino

eldorado-resorts-isle-capri-casinos-dealCasino operator Eldorado Resorts has struck a $1.7b deal to acquire St. Louis-based rival Isle of Capri Casinos.

On Monday, Eldorado announced that it had reached a deal to pay $23 per share, a 36% premium over Isle of Capri’s current share price, in a mix of 58% cash and 42% in Eldorado stock. J.P. Morgan has committed $2.1b in financing for the deal, which will see Eldorado assuming $929m of Isle of Capri’s long-term debt.

While both company’s boards of directors have approved the deal, each company’s shareholders will also have to sign on for the deal to go ahead. Assuming all goes well, the acquisition is expected to conclude by Q2 2017.

Counting Isle of Capri’s 13 gaming venues, the enlarged Eldorado will control a total of 20 casinos across 10 US states. These 20 properties, which host a combined 20,800 slots and VLT machines and 560 gaming tables, generated revenue of around $1.8b in the 12 months ending June 30.

Eldorado CEO Gary Carano called the acquisition “a transformational growth opportunity” in keeping with the company’s “long-term strategy to opportunistically expand our regional gambling platform through accretive acquisitions.”

Carano noted that, as recently as 2014, Eldorado had wholly owned a mere two casinos as well as a shared interest in a third property. No one market will be responsible for more than 15% of the enlarged company’s revenue. Eldorado says it believes it can realize $35m in those dreaded ‘synergies’ in the first year following the consummation of the deal.

The Eldorado-Isle of Capri deal continues a wave of consolidation in the US regional casino market. So far this year, Boyd Gaming has acquired Cannery Casino Resorts and the Aliante in North Las Vegas, while Station Casinos acquired the Palms Casino Resort.

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