VICI Properties (NYSE:VICI) said Thursday it, together with Century Casinos (CNTY), will acquire Rocky Gap Casino Resort in Flintstone, Maryland from Golden Entertainment, (GDEN) for $260M in cash.
VICI will acquire a stake in the land and buildings associated with Rocky Gap for ~$203.9M, representing a 7.6% cap rate.
CNTY will acquire the operating assets of the property for ~$56.1M using cash from its balance sheet.
The deal is expected to be immediately accretive to earnings.
Once the deal closes, Rocky Gap will be added to the existing triple-net master lease deal between VICI and CNTY, and annual rent will increase by $15.5M.
The term of the master lease will be extended such that, once the deal closes, the lease will have a full 15-year initial base lease term, with four five-year tenant renewal options.
Purchase price for the casino operations represents an implied 2021 EBITDA multiple of 4.9x.
The multiple excludes any potential cost synergies and operational improvements and deducts annual rent from the VICI lease from EBITDA.
With the addition of Rocky Gap and the pending acquisition of Nugget Sparks, CNTY’s North American portfolio will grow to 11 casinos.
On a pro-forma basis, after giving effect to both acquisitions, CNTY expects to generate 94% of its adj. EBITDA from its North American casinos.
The Rocky Gap deal is expected to close in mid-2023.