American gaming firm Golden Entertainment has signed definitive agreements that are to see it divest its video-based distributed gaming operations in the states of Montana and Nevada for an aggregate consideration of some $361.5 million.
The deals will involve J&J Ventures Gaming paying roughly $247.5 million for the Las Vegas-headquartered company’s operations in Nevada alongside around $114 million for its compatriot business in Montana. The arrangements set to close before the end of the year remain subject to customary working capital adjustments and are to additionally embrace expected purchased cash of about $39 million and $5 million respectively.
Golden Entertainment currently owns and operates casinos, taverns and distributed gaming facilities in the American states of Nevada, Montana and Maryland featuring nearly 16,800 slots alongside more than 100 gaming tables. This portfolio runs to nine casinos and 60 taverns in southern Nevada as well as western Maryland’s 216-room Rocky Gap Casino Resort facility.
In addition to these divestitures and Golden Entertainment has signed a five-year agreement that is to see privately-held J&J Gaming support its branded tavern-based gaming operations in Nevada. The company did not disclose the financial details of this latter arrangement with the established Illinois-based distributed gaming operator but did state that these terms are consistent with its ‘past practice’.
The aggregated consideration of these deals represents a multiple of approximately nine times the $44 million Golden Entertainment’s distributed gaming operation chalked up in adjusted EBITDA for the twelve months to the end of December excluding $3.8 million in allocated corporate costs. The company now expects to focus more of its time and resources on its portfolio of wholly-owned casinos and taverns in Nevada so as to create additional shareholder value.
“Our leading distributed gaming operations in Nevada and Montana were built over the last 20 years through the hard work and dedication of team members who provide exceptional service and support to our valued route partners,” Blake Sartini, Chairman and Chief Executive Officer for Golden Entertainment, said. “We believe these transactions 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 [our] wholly-owned tavern portfolio.”
