Earlier this week, the gambling company Century Casinos, based in Colorado Springs, made an announcement that it has agreed to purchase 50% of the Sparks-based Nugget Casino Resort in a deal estimated at a total of $195 million. This is the first large acquisition of the gambling operator since before the Covid-19 pandemic (late 2019).
Century Casinos revealed that it has agreed to buy half of a Marnell Gaming subsidiary known as Smooth Bourbon, which is the current owner of the land and buildings of the aforementioned casino resort. Under the terms of the agreement, Century Casinos is also set to acquire all of another Marnell’s subsidiary, Nugget Sparks, which operates the Nugget Casino Resort in Sparks.
Apart from this, the Colorado Springs-based casino company is also given a 5-year option to purchase the remaining 50% of Smooth Bourbon for $105 million, along with an additional 2% per year until the company decides to exercise this option. As revealed by the operator, the deal is expected to be finalized at the beginning of the second quarter, with the additional buy-out option set to be exercised a year later. When the deal is completed, more than 3,000 people in a total of 10 casinos are set to be employed by Century Casinos.
The deal is being financed through Goldman Sachs Bank, which has agreed to give a $350-million loan for the takeover of the Sparks casino resort and refinance the rest of the company’s debt. The bank has also agreed to provide a revolving credit line of $30 million.
Erwin Haitzmann and Peter Hoetzinger, the co-CEOs of Century Casinos, confirmed that their company had been looking to enter the Reno market for quite some time. They further noted that, according to the company, the Nugget Casino Resort was an excellent addition to its portfolio. Mr. Haitzmann and Mr. Hoetzinger shared that Century Casinos has become interested in the Reno area by recent economic development projects, including some major facilities in Google, Apple, Amazon, Tesla and Switch.
The Nugget Casino Resort Seen as Excellent Addition to Century Casinos’ Portfolio
The Sparks-based Nugget Casino Resort has 1,382 hotel rooms hosted in a couple of 29-story towers. The resort also features meeting and convention space hated on 110,000 square feet, 7 restaurants, an outdoor amphitheater with 8,555 seats, as well as 50,200 square feet of casino space, offering 29 table games and 859 slot machines. There is also a 5-story parking garage and a surface parking lot offering almost 2,500 parking spaces in total.
Currently, about 600 people work in the Nugget Casino Resort.
The casino resort was acquired by Marnell Gaming in 2016, with the company having spent $90 million to renovate the property, as it had plans to sell it afterward. As it was confirmed by Mr. Hoetzinger, Century Casinos has been working on the deal for about a year. As mentioned above, the transaction is its first major acquisition since the takeover of 3 casinos in the states of Missouri and West Virginia that helped the company double its size as part of a strategy aimed at focusing on gaming operations in North America.
According to the co-CEOs of Century Casinos, the acquisition of the Nugget Casino Resort would be a very good addition to the company’s assets from a profitability point of view.
The Nugget has a strong convention and entertainment business, as well, which comes as an excellent addition to its casino business. Last year, the resort generated $100.4 million worth of revenue, while its operating profits were estimated at $32.8 million. During the first 3 quarters of 2021, Century Casinos generated revenue of $281.2 million, while its operating profits amounted to $73 million after adjustments for one-time costs and accounting costs were made.