Eldorado Resorts to Acquire Tropicana Entertainment for $1.85 Bi - KTVN Channel 2 - Reno Tahoe Sparks News, Weather, Video

Eldorado Resorts to Acquire Tropicana Entertainment for $1.85 Billion

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Eldorado Resorts is buying almost all the assets from Tropicana Entertainment Incorporated, in an acquisition worth $1.85 billion.

Eldorado Resorts has properties all over the country; 20 properties in 10 different states. With this acquisition, it adds seven properties from Tropicana in six different states, including two in Nevada: the Montbleu in South Lake Tahoe and the Tropicana in Laughlin.

After Eldorado Resorts (ERI) made the announcement Monday, its stock price saw a big jump on the NASDAQ. The company has been on a steady rise over the last five years, but it hit its highest value yet following the news.
 
Eldorado Resorts owns the Eldorado in Downtown Reno, the Silver Legacy, and the Circus Circus, as well as 17 other properties around the country.

This purchase does not affect the Tropicana in Las Vegas, which is owned and operated by a different company. The purchase also doesn't include the Tropicana property in Aruba.


Full statement from Eldorado Resorts below:

Eldorado Resorts, Inc. announced Monday that it entered into a definitive agreement to acquire Tropicana Entertainment Inc. for $1.85 billion in cash.

Earlier it announced that it would also acquire the Grand Victoria Casino in Elgin, Illinois for $327.5 million in cash.

Eldorado intends to fund the transaction consideration of approximately $640 million payable by Eldorado and repay debt outstanding under Tropicana’s credit facility with cash generated from its current operations, proceeds from pending asset sales, Tropicana’s cash on hand, cash flow generated from Tropicana operations through closing and $600 million of committed debt financing from J.P. Morgan.

The Illinois transaction is expected to close in the fourth quarter of 2018, subject to regulatory approvals and other customary closing conditions and is subject to a customary working capital adjustment.

Gary Carano, Chairman and Chief Executive Officer of Eldorado, commented, “With our proposed acquisition of Tropicana Entertainment, Eldorado Resorts is yet again pursuing a large transaction that is expected to be accretive, further increase the scale of our regional gaming platform and drive free cash flow growth. Our recent initiatives to enhance shareholder value, including the Tropicana transaction and our agreement to divest two properties, reflect significant milestones in the successful ongoing execution of our long-term strategy to opportunistically expand our regional gaming platform. Over the last twelve months, we have created tremendous shareholder value through our ability to realize and exceed the anticipated synergies from the Isle of Capri transaction which quickly reduced our initial purchase price multiple and we expect to achieve the same with the Tropicana transaction.

“The acquisition of seven Tropicana Entertainment properties will allow Eldorado to enter two new gaming jurisdictions and deliver additional financial and geographic diversity to our operating base. We have identified $40 million of synergies that we expect to realize in the first year of our ownership. We believe the financing structure for the transaction, which includes the participation of a real estate investment trust, represents an innovative means to drive growth and add value for our shareholders while maintaining financial flexibility as we continue to own the majority of the underlying real estate across our remaining property portfolio.

“As we have done over the past several years with other major transactions, Eldorado Resorts intends to implement our proven strategy of enhancing margins by further improving customer service and the customer experience while focusing on promotion and other spending in all areas of the newly acquired properties. Overall, the Tropicana portfolio is in good shape and we have no immediate significant capex plans for the properties. Ultimately, we believe that the addition of the highly complementary Tropicana Entertainment assets to the Eldorado Resorts family of properties will result in attractive near- and long-term growth for Eldorado and another opportunity to create new value for shareholders.”

Grand Victoria Casino, located in Elgin, Illinois, is approximately 40 miles west of downtown Chicago along the banks of the Fox River. The property features 1,088 slot machines, 30 table games, a 12-table poker room and four dining options, including Prime BurgerHouse, the award-winning Buckinghams Steakhouse & Lounge, the Indulge Show Kitchen Buffet and the 24-hour Crave Deli. It also offers 7,495 square feet of meeting and banquet space, event and concert facilities, a 1,450-space parking garage, and additional surface parking for 600 vehicles.

(Eldorado Resorts Inc. contributed to this report.)

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