Eldorado Resorts’ Tropicana Atlantic City acquisition, complete
The New Jersey Casino Control Commission approved Eldorado Resorts as Tropicana Atlantic City’s parent company.
US.- Tropicana Atlantic City is now under Eldorado Resorts’ orbit as the New Jersey Casino Control Commission granted the plenary licence. The approval could also benefit Eldorado should it strike a deal with Caesars Entertainment.
Should a merger occur, the company would hold four of the nine casino licences in Atlantic City. That would mean a potential violation of the Casino Control Act’s provision regarding “undue economic concentration.”.
“I can’t comment on a particular (move),” Eldorado CEO Thomas Reeg said about the future acquisitions. “I would say we have been an inquisitive company in the past. To the extent there are opportunities that make sense for our shareholders that we can [inaudible] responsibly, we can operate and drive improved performance, we would take a hard look at those.”
Chairman James Plousis expects Eldorado to “positively contribute to this market.”
“A significant part of Atlantic City’s future is the ability of the gaming industry to grow its customer base and thereby bring new customers to the market,” he said.
The acquisition
Eldorado Resorts, Inc. completed its previously announced acquisition of Tropicana Entertainment Inc. The transaction further increases the company’s scale, as it reaches 12 states with 26 facilities. Under the terms of the transaction, valued at approximately US$1.85 billion, a subsidiary of Eldorado merged into Tropicana and Tropicana became a wholly owned subsidiary of Eldorado.
The transaction is expected to be immediately accretive to Eldorado’s free cash flow and diluted earnings per share, inclusive of identified expected cost synergies of approximately US$40 million expected to be realised in Eldorado’s first year of operation of Tropicana. The combination creates a premier, diversified regional gaming platform with combined annual revenue of more than US$2.7 billion and combined adjusted EBITDA of approximately US$697 million.
