Toronto-based private equity firm Onex Corp. invested a total $137 million for its 61 percent stake in the Tropicana Las Vegas, the firm revealed in its second-quarter earnings release on Wednesday.
A partnership between Onex and a group led by former MGM Grand Inc. executive Alex Yemenidjian acquired the property from Tropicana Entertainment in Delaware bankruptcy court.
The group took over operations of the property July 1 after buying nearly $440 million in debt leveraged against the 34-acre property at a discount.
The Tropicana Las Vegas has no debt, approximately $10 million in cash, and commitments from Onex and other equity holders to invest at least $75 million in a capital refurbishment program, Onex said in a release.
“We’re very excited about this investment,” Onex Chairman and Chief Executive Officer Gerry Schwartz said in a statement. “We acquired the business during a cyclical low in the industry and have capitalized it with no debt, providing Alex and his team with significant operational flexibility to complete the turnaround.”
Tropicana is the first gaming investment by Onex, which has holdings in various industries including electronic manufacturing services, financial services, customer management services, managed health care and communications infrastructure.
The firm also manages real estate holdings in Maryland, California, Texas, Delaware, Florida, Pennsylvania, Virginia and New York.
Onex and Yemenidjian plan to use the Tropicana purchase as a launching pad for a larger casino company and continue to look for other distressed gaming investment opportunities.
Onex is publicly traded on the Toronto Stock Exchange.
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