Caesars Corp. buying Indiana properties for $1.7B

Updated November 17, 2017 - 4:24 pm

Caesars Entertainment Corp. has agreed to buy Indianapolis-based horse racing company Centaur Holdings LLC for $1.7 billion in the largest acquisition in the U.S. gaming sector this year.

The deal is expected to close in the first half of 2018.

Caesars will acquire Hoosier Park Racing and Casino in Anderson, Indiana, as well as the Indiana Grand Racing and Casino in Shelbyville, Indiana, the company said in a statement. The race tracks both feature 2,000 slots and own entertainment and dining facilities.

The deal marks the re-emergence of Caesars, which has been sidelined for years as its operating unit battled insolvency caused by a debt-driven expansion strategy and an economic downturn.

Caesars Entertainment Operating Co. filed for bankruptcy in January 2015 and emerged from bankruptcy a month ago. The company’s last major acquisition was the purchase of Planet Hollywood in Las Vegas for $700 million in 2009.

Chief Executive Officer Mark Frissora is aiming to create value through acquisitions by leveraging Caesars’ supply chain and Total Rewards loyalty program, which has 50 million participants.

Millions of visitors

Centaur properties receive 6.5 million visitors a year and have 1.1 million loyalty members. Centaur customers would be able to spend their points acquired in Indianapolis during a trip to Caesars’ properties in Las Vegas.

“We anticipate that the deployment of Total Rewards will bring substantial benefits to current Centaur customers, and the implementation of our centralized supply chain and efficient operating model will drive synergies,” Frissora said in a statement.

Caesars will pay $1.63 billion upfront and $75 million in deferred compensation. Caesars did not disclose how the deal would be financed. The company has about $2 billion of cash on its balance sheet, according to Union Gaming analyst John Decree.

The price represents an implied multiple of 8.3 times Centaur’s earnings before interest, taxes, depreciation, amortization and rent costs in year two following the closing of the deal, inclusive of expected synergies, Frissora said in the statement.

If table games are installed, the effective purchase price would be less than 7 times by that time, he said. The Indiana Legislature in 2015 enacted a law that would allow racinos to add table games in 2021.

“This deal will be a field test of the power of the Total Rewards loyalty program. Caesars has seen significant revenue uplift in the past when it has installed the network on properties,” said SunTrust analyst Patrick Scholes.

Sector Consolidation

The U.S. gaming sector has been experiencing increased consolidation in recent years as the huge debt burdens caused by the recession recede.

Many operators like Caesars now have stronger balance sheets and are using it to build on organic growth that is in the single digits.

They are finding willing sellers among private equity firms that bought casinos either right before or right after the Great Financial Crisis, said Union Gaming’s Decree.

”We are seeing a wave of private equity firms exit as their ownership life cycles come to an end and valuations are strong,” he said. ”It is a good time for many of the these companies to sell.”

Private equity firms’ investment cycle may last from three to seven years, though economic slowdowns can cause firms to hold on for longer periods.

Golden Entertainment agreed to buy American Casino & Entertainment Properties, the owner of the Stratosphere, in June for $850 million.

A month earlier, Meruelo Group, the owner of Grand Sierra Resort, agreed to buy the SLS Las Vegas for an undisclosed sum. Both American Casino and SLS were owned by private equity groups.

More to come?

Caesars may soon be scooping up more gaming assets, Frissora hinted in the statement.

”We have a strong financial position with solid cash flows to pursue other expansion opportunities with attractive returns,” he said

The acquisition trend will most certainly continue in the new year, said Decree.

”There will be more consolidation and deals in 2018 as there are almost no available gaming licenses up for grabs.”

Caesars shares closed down 43 cents, or 3.33 percent, at $12.32 on Friday.

Contact Todd Prince at or 702-383-0386. Follow @toddprincetv on Twitter.

Lehman Brothers bet big on Las Vegas
Lehman Brothers collapsed 10 years ago, helping send the country into the Great Recession.
Fremont9 opens downtown
Fremont9 apartment complex has opened in downtown Las Vegas. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Ross & Snow launches in Las Vegas
Luxury shoe brand Ross & Snow has opened in Las Vegas, featuring "functional luxury" with premium shearling footwear. (Bailey Schulz/Las Vegas Review-Journal)
Remote Identification and Drones
DJI vice president of policy and public affairs discusses using remote identification on drones. (Bailey Schulz/Las Vegas Review-Journal)
Drones and public safety in Nevada
Two representatives in the drone industry discuss UAV's impact on public safety. (Bailey Schulz/Las Vegas Review-Journal)
Frontier Airlines to launch flights from Las Vegas to Mexico
Frontier, a Denver-based ultra-low-cost carrier, will become the first airline in more than a decade to offer international service to Canada and Mexico from Las Vegas when flights to Cancun and Los Cabos begin Dec. 15. (Rick Velotta/Las Vegas Review-Journal)
MGM Resorts International CEO Jim Murren addresses Oct. 1 lawsuits
MGM Resorts International Chairman and CEO Jim Murren addresses criticism his company has received for filing a lawsuit against the survivors of the Oct. 1 shooting. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International opens the doors on MGM Springfield
Massachusetts’ first hotel-casino opens in downtown Springfield. The $960 million MGM Springfield has 252 rooms and 125,000-square-feet of casino. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International prepares to open MGM Springfield
Las Vegas-based MGM Resorts International gave news media and invited guests a preview of the $960 million MGM Springfield casino in Massachusetts. The commonwealth's first resort casino will open Friday, Aug. 24. (K.M. Cannon/Las Vegas Review-Journal)
A Walk Through Circus Circus
It only takes a short walk through Circus Circus to realize it attracts a demographic like no other casino on the Strip: families with young children. (Todd Prince/Las Vegas Review-Journal)
Morphy Auctions, a vintage slot machines seller, wants gaming license
Vice president Don Grimmer talks about Morphy Auctions at the company's warehouse located at 4520 Arville Street in Las Vegas on Thursday, Aug. 16, 2018. (Rick Velotta/Las Vegas Review-Journal)
Nevada's venture capital money doesn't stay in state
Zach Miles, associate vice president for economic development for UNLV, said there’s venture money in Southern Nevada, “but trying to find the right groups to tap into for that money is different.” According to a 2017 report from the Kauffman Foundation, Las Vegas ranked number 34 out of 40 metropolitan areas for growth entrepreneurship, a metric of how much startups grow. With a lack of growing startups in Las Vegas, investment money is being sent outside of state borders. The southwest region of the U.S. received $386 million in funding in the second quarter, with about $25.2 million in Nevada. The San Francisco area alone received about $5.6 billion. (source: CB Insights)
Neon wraps can light up the night for advertising
Vinyl wrap company 5150 Wraps talks about neon wraps, a new technology that the company believes can boost advertising at night. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Nevada on the forefront of drone safety
Dr. Chris Walach, senior director of Nevada Institute for Autonomous Systems, talks to a reporter at NIAS's new Nevada Drone Center for Excellence of Public Safety, located inside the Switch Innevation Center in Las Vegas. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
Motel 8 on south Strip will become site of hotel-casino
Israeli hoteliers Asher Gabay and Benny Zerah bought Motel 8 on the south Strip for $7.4 million, records show. They plan to bulldoze the property and build a hotel-casino. Motel 8 was built in the 1960s and used to be one of several roadside inns on what's now the south Strip. But it looks out of place today, dwarfed by the towering Mandalay Bay right across the street.
Project billed as one of the world's largest marijuana dispensaries plans to open Nov. 1
Planet 13 co-CEO Larry Scheffler talks about what to expect from the new marijuana dispensary, Thursday, July 19, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Oasis Biotech opens in Las Vegas
Brock Leach, chief operating officer of Oasis Biotech, discusses the new plant factory at its grand opening on July 18. (Bailey Schulz/Las Vegas Review-Journal)
UNLV Tech Park innovation building breaks ground
Construction on the first innovation building at the UNLV Tech Park is underway. (Bailey Schulz/Las Vegas Review-Journal)
Caesars Forum Meeting Center
Caesars broke ground Monday on its $375 million Caesars Forum Meeting Center (convention center) just east of the High Roller observation wheel. (Caesars Entertainment)
Technology reshapes the pawn shop industry
Devin Battersby attaches a black-colored device to the back of her iPhone and snaps several of the inside and outside of a Louis Vuitton wallet. The device, installed with artificial intelligence capabilities, analyzes the images using a patented microscopic technology. Within a few minutes, Battersby receives an answer on her app. The designer item is authentic.
Recreational marijuana has been legal in Nevada for one year
Exhale Nevada CEO Pete Findley talks about the one year anniversary of the legalization of recreational marijuana in Nevada. (K.M. Cannon/Las Vegas Review-Journal)
Young adults aren't saving for retirement
Financial advisors talk about saving trends among young adults. (Bailey Schulz/Las Vegas Review-Journal)
News Headlines
Add Event
Home Front Page Footer Listing
You May Like

You May Like