Golden Entertainment Enters Into Definitive Agreements to Divest Distributed Gaming Operations in Nevada and Montana
06 Mars 2023 - 2:00PM
Business Wire
Golden Entertainment, Inc. (NASDAQ: GDEN) (“Golden” or the
“Company”) announced today that it entered into definitive
agreements to divest its distributed gaming operations in Nevada
and Montana (“Distributed Gaming Operations”) for aggregate cash
consideration of $322.5 million, plus $39 million of estimated
purchased cash at closing. Pursuant to the terms of the agreements,
J&J Ventures Gaming, LLC (“J&J Gaming”) will acquire
Golden’s Distributed Gaming Operations in Nevada for $213.5 million
plus an estimated $34 million of purchased cash and Golden’s
Distributed Gaming Operations in Montana for $109 million plus an
estimated $5 million of purchased cash, subject to customary
working capital adjustments.
In addition, Golden will enter into a five-year agreement with
J&J Gaming under which J&J Gaming will support the gaming
operations of Golden’s branded tavern locations in Nevada at
financial terms consistent with the Company’s past practice.
The aggregate cash consideration plus purchased cash represents
a multiple of approximately 9.0x of the Adjusted EBITDA for
Golden’s Distributed Gaming segment for the year ended December 31,
2022 of $44 million, net of $3.8 million of corporate costs
allocated to the Company’s Distributed Gaming segment.
Blake Sartini, Chairman and Chief Executive Officer of Golden,
commented, “Our leading Distributed Gaming Operations in Nevada and
Montana were built over the last 20 years through the hard work and
dedication of our team members who provide exceptional service and
support to our valued route partners. We believe this transaction
will provide further success for our route partners through sharing
of best practices and new technology. We anticipate our Distributed
Gaming team members will continue to serve our route partners with
the same dedication under J&J Gaming’s ownership. Our
confidence in J&J Gaming’s future success is highlighted by our
new long-term agreement with J&J Gaming to service Golden’s
wholly owned tavern portfolio. For Golden, these transactions will
allow us to focus our management team and capital on our portfolio
of wholly owned casinos and taverns in Nevada and create additional
value for our shareholders.”
Established almost 100 years ago, J&J Gaming is a privately
held business and the leading distributed gaming operator in
Illinois, with related operations in several other states.
The transactions are expected to close prior to year end,
subject to customary regulatory approvals and closing conditions.
Latham & Watkins LLP is acting as legal counsel to Golden in
connection with the transactions.
About Golden
Golden owns and operates a diversified entertainment platform,
consisting of a portfolio of gaming and hospitality assets that
focus on casino, branded tavern and distributed gaming operations.
Golden operates nearly 16,800 slots, over 100 table games, and over
6,200 hotel rooms. Golden owns ten casinos – nine in Southern
Nevada and one in Maryland – and more than 60 traditional taverns
in Nevada. Through its Distributed Gaming Operations in Nevada and
Montana, Golden operates video gaming devices at over 1,000
locations. For more information, visit www.goldenent.com.
About J&J Gaming
J&J Ventures Gaming and J&J Ventures Amusements are
headquartered in Effingham, Illinois, where their predecessor,
J&J Ventures, Inc., began route operations in 1929. Today,
J&J Gaming is one of the largest terminal operators in Illinois
and Pennsylvania, where it provides unparalleled expertise in
gaming management and route operations through its 24/7 service,
detailed reporting, fast and flexible payouts, a full-service
marketing team, and more. J&J Amusements is a leading operator
of non-gaming devices like dart machines, pool tables, jukeboxes,
ATMs, and other amusement devices. To learn more about J&J
Gaming and J&J Amusements, visit www.jjventures.com.
Forward-Looking
Statements
This press release contains forward-looking statements regarding
future events and the Company’s future results that are subject to
the safe harbors created under the Securities Act of 1933 and the
Securities Exchange Act of 1934. Forward-looking statements can
generally be identified by the use of words such as “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “forecast,”
“intend,” “may,” “plan,” “project,” “potential,” “seek,” “should,”
“think,” “will,” “would” and similar expressions, or they may use
future dates. In addition, forward-looking statements in this press
release include, without limitation: statements regarding: the
proposed sale of the Company’s Distributed Gaming Operations to
J&J and the pending Rocky Gap sale (collectively, the
“Transactions”), including the anticipated timing of the closing of
the Transactions and satisfaction of regulatory and other
conditions; the Company’s anticipated operations, financial
position, performance or prospects following the closing of the
Transactions; the Company’s strategies, objectives and business
opportunities; anticipated future growth and trends in the
Company’s business or key markets; and other characterizations of
future events or circumstances as well as other statements that are
not statements of historical fact. Forward-looking statements are
based on the Company’s current expectations and assumptions
regarding the Transactions, its business, the economy and other
future conditions. These forward-looking statements are subject to
assumptions, risks and uncertainties that may change at any time,
and readers are therefore cautioned that actual results could
differ materially from those expressed in any forward-looking
statements. Factors that could cause the actual results to differ
materially include: risks and uncertainties related to the
Transactions, including the failure to obtain, or delays in
obtaining, required regulatory approvals or clearances; the failure
to satisfy any of the closing conditions to any of the Transactions
on a timely basis or at all; changes in national, regional and
local economic and market conditions; legislative and regulatory
matters (including the cost of compliance or failure to comply with
applicable laws and regulations); increases in gaming taxes and
fees in the jurisdictions in which the Company operates; the
Company’s ability to realize the anticipated cost savings,
synergies and other benefits of its casino and other acquisitions;
litigation; increased competition; the Company’s ability to renew
its distributed gaming contracts; reliance on key personnel
(including our Chief Executive Officer, President and Chief
Financial Officer, and Chief Operating Officer); the level of the
Company’s indebtedness and its ability to comply with covenants in
its debt instruments; the uncertainty of the extent, duration and
effects of the COVID-19 pandemic and the response of governments;
terrorist incidents; natural disasters; severe weather conditions
(including weather or road conditions that limit access to the
Company’s properties); the effects of environmental and structural
building conditions; the effects of disruptions to the Company’s
information technology and other systems and infrastructure;
factors affecting the gaming, entertainment and hospitality
industries generally; and other risks and uncertainties discussed
in the Company’s filings with the SEC, including the “Risk Factors”
sections of the Company’s most recent Annual Report on Form 10-K.
The Company undertakes no obligation to update any forward-looking
statements as a result of new information, future developments or
otherwise. All forward-looking statements in this press release are
qualified in their entirety by this cautionary statement.
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version on businesswire.com: https://www.businesswire.com/news/home/20230306005233/en/
Golden Entertainment, Inc. Charles H. Protell President and
Chief Financial Officer (702) 893-7777
Investor Relations Richard Land JCIR (212) 835-8500 or
gden@jcir.com
Golden Entertainment (NASDAQ:GDEN)
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