Eldorado Resorts has this week completed the previously announced purchase of the Grand Victoria Casino in Elgin, Illinois for total consideration of $327.5m in cash, subject to a customary working capital adjustment. The transaction was financed with cash-on-hand and borrowings under the company’s revolving credit facility.
The purchase price represents a multiple of approximately nine trailing 12 months adjusted EBITDA (for the period ended June 30, 2018) which Eldorado expects to reduce to approximately six or less within 18 months based on expected operating synergies and cost savings.
Gary Carano, chairman and CEO, heralded the acquisition, saying: “Grand Victoria Casino is an excellent addition to our operations and the transaction is consistent with our long-term strategy to build shareholder value by pursuing accretive acquisitions. As with our other recent acquisitions, we intend to quickly implement our proven integration and operating strategies, allowing us to increase margins and cash flow from the property and thus reduce the purchase multiple.
“Grand Victoria Casino is one of the premier casinos in the Chicagoland market and given the quality of the property, our immediate focus is on further enhancing the guest experience and operating results as there is no need to undertake capital investments at the property beyond normal maintenance expenses. We are very excited to welcome the Grand Victoria employees to the Eldorado family.”
The casino features 1,088 slot machines, 30 table games, a 12-table poker room and four dining options. 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.
The transaction increases Eldorado’s property portfolio to 21 properties in 11 states with a total of approximately 22,000 slot machines and VLTs and 640 table games, over 7,000 hotel rooms and approximately 13,000 team members.