Golden Entertainment to buy American Casino & Entertainment for $850m

Golden Entertainment has agreed to buy American Casino & Entertainment Properties for $850m.

Under the terms of the deal, Golden will pay $781m in cash plus around four million shares of Golden stock.

American Casino owns three properties in Las Vegas including the Stratosphere Casino, Hotel & Tower, Arizona Charlie's Decatur and Arizona Charlie's Boulder, and a fourth property, the Aquarius Casio Resort in Laughlin. It is expected to generate around $413m of net revenues and $103 of earnings before interest, taxes, depreciation and amortisation in 2017 and Golden expects to achieve approximately $18m of annual run-rate synergies post-closing.

Upon completion of the deal, Golden will operate over 15,800 slot machines, 114 table games and more than 5,100 hotel rooms across eight properties and almost 1,000 distributed gaming locations including the largest branded tavern portfolio in Nevada.

Charles Protell, chief financial officer of Golden, said: "This transaction significantly increases the size of our operations and allows us to access the capital markets more efficiently while enhancing our ability to further expand our leading presence in distributed gaming. At closing, we anticipated our funded total debt to be approximately $1bn resulting in a net leverage ratio of less than 5.5x. Post-closing, we anticipated leverage will be reduced by operating cash flow of the combines businesses.

"With the acquisition of American, we will improve our position to benefit from Nevada's strong economic trends which are driving gaming, room and food and beverage revenues on the Last Vegas Strip, in the Last Vegas locals and in other Nevada gaming markets."