Eldorado Resorts agreed to buy Isle of Capri Casinos for $1.7 billion in combined stocks and cash including $929 million of long-term debt.
Following the completion of the transaction, Eldorado Resorts will add 13 casino-resorts to its portfolio, for a total of 20 properties in ten states. Isle of Capri Casinos operates 14 casino properties in Colorado, Florida, Iowa, Louisiana, Mississippi, Missouri and Pennsylvania.
“In our business there are risks and what that does, by giving us 20 casinos in 10 different states, is make it so no one casino will contribute more than 15 percent to (Earnings Before Interest, Taxes, Depreciation and Amortization),” Gary Carano, chairman and CEO of Eldorado Resorts, told the Reno Gazette-Journal. “That’s spreading our risk across all 20 states. So in our business, like in any business, you like to be in as much control as you can of your risk factors.”
Eldorado’s expanded property portfolio will include about 20,800 slot machines and video lottery terminals, more than 560 table games and 6,500 hotel rooms.
Eldorado received the $2.1 billion in financing from J.P. Morgan, according to a press release. The transaction was unanimously approved by the boards of directors of both Eldorado Resorts and Isle of Capri Casinos.
“This is a good day for Eldorado Resorts and Eldorado Resorts’ shareholders,” Carano said. “It’s truly a transformational deal for us. We’re acquiring a great company, one that was founded by the Goldstein family. They built the first riverboat casino in America. There’s a lot of similarities between the two companies. A lot of similarities in how they treat their team members and customers.”
Carano said they plan to “marry best practices from both companies,” according to a press release.
The purchase is subject to approval by stockholders, gaming authorities, the expiration of the applicable Hart-Scott-Rodino waiting period and other closing conditions, and is expected to be completed in the second quarter of 2017.
Eldorado also purchased the other 50 percent shares of Silver Legacy and all of Circus Circus last year. The Nevada Gaming Commission approved the purchase on Nov. 19, 2015.