Golden Entertainment has announced it will sell its Maryland-based Rocky Gap Casino to Century Casino for a total of $260m. Under the terms of the agreement, Century Casino will acquire the operations of Rocky Gap for $56.1m, while the retail casino assets and the land beneath it will cost $203.9m.
While Century will be paying for and running Rocky Gap’s operations, it will be VICI Properties who will buy the real estate from Golden Entertainment, as the two companies have joined forces to make this acquisition.
The aggregate cash consideration represents a multiple of approximately 10x adjusted property EBITDA for the trailing one-year period that ended June 30, 2022. The transaction is expected to close in mid-2023, contingent on regulatory approvals and closing conditions.
The overall purchase price reflects Rocky Gap’s implied earnings before interest, taxes, depreciation and EBITDA multiple of 4.9x for 2021. Century has confirmed that it will fund the acquisition with cash from its balance sheet.
Rocky Gap, located in Flintstone, Maryland, reported a $78m revenue and an adjusted EBITDA of $27m for its 2021 financial year, which ended December 31. The property features a 25,000 square foot gaming floor, 630 slot machines, 16 table games, 198 hotel rooms and an 18-hole golf course designed by Jack Nicklaus.
Golden Entertainment CEO and Chairman commented: “We are confident that Century Casinos will be a terrific operator of Rocky Gap and a strong partner to the community going forward. Strategically, this transaction will enable Golden to focus on the continued success of our operations in core markets.
“The sale price represents an attractive, premium multiple relative to our current valuation and will provide additional financial flexibility for us to create shareholder value.”
