Golden Entertainment announced Thursday that it entered into definitive agreements to sell the Rocky Gap Casino Resort in Maryland for $260 million in cash.
Pursuant to the terms of the agreements, Century Casinos will acquire the operations of Rocky Gap for $56.1 million, subject to customary working capital adjustments, and VICI Properties will acquire an interest in the land and buildings associated with Rocky Gap for $203.9 million.
The cash consideration represents a multiple of approximately 10x Adjusted Property EBITDA for the trailing twelve-month period ended June 30, 2022, Golden Entertainment said.
The transaction is expected to close in mid-2023, subject to regulatory approvals and closing conditions. Rocky Gap is one of six casinos in Maryland. The Maryland casino gambling market is worth about $2 billion annually.
“Rocky Gap is a truly unique destination resort and I want to thank all of our team members who work hard to consistently deliver a premier gaming and entertainment experience to our guests,” Blake Sartini, Chairman and Chief Executive Officer of Golden Entertainment, said in a statement.
“Since Golden began operating Rocky Gap seven years ago, we have invested our resources to enhance the property’s amenities and our contributions to the State of Maryland. We are confident that Century Casinos will be a terrific operator of Rocky Gap and 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.”
Golden Entertainment said that Macquarie Capital is acting as financial advisor and Latham & Watkins is acting as legal counsel in connection with the transaction.
After the sale, Golden Entertainment will own nine casinos, all in Southern Nevada. The company also operates video gaming devices at about 1,100 locations and owns more than 60 traditional taverns in Nevada. Golden Entertainment is also licensed in Illinois and Pennsylvania to operate video gaming terminals.