Golden Entertainment finalizes $341 million gaming industry merger

Golden Gaming’s $341 million merger with Minnesota-based Lakes Entertainment was finalized Monday, creating a publicly traded casino, tavern and slot machine route operation with business interests in Nevada and Maryland.

The transaction, announced in January, turned family-owned Golden Gaming into Golden Entertainment.

Under terms of the merger, Lakes was valued at $9.57 per share, which represented a 37 percent premium to its closing price in late January. The Sartini family, sole owners of Golden Gaming, was issued more than 7.8 million shares of stock in the new company, a 35 percent ownership stake. Current Lakes shareholders retain 65 percent of the company, which will be traded on the Nasdaq starting Tuesday under the symbol GDEN.

Golden Entertainment CEO Blake Sartini said the transaction was a “monumental and meaningful day” for the company established in 2001.

“With Golden Entertainment, we now have a national, diversified gaming company with strong assets across the country,” Sartini said. “And with this infrastructure, we look forward to further enhancing our unique blend of distributed gaming, casinos and taverns.”

The combined company is Nevada’s largest slot machine route operator with more than 7,600 games in 670 locations. The company’s tavern division has 48 locations under five brands. Golden also owns three casinos in Pahrump.

Through Lakes, the deal brought Golden ownership of the Rocky Gap Casino Resort inside Rocky Gap State Park near Cumberland, Md. The 200-room hotel includes the only Jack Nicklaus Signature golf course in Maryland and is a three-hour drive from 10 million people.

Lakes last week said it grew revenue almost 9 percent in the second quarter, to $15.3 million, on higher slot machine play and table game hold at Rocky Gap.

Sartini last month told the Nevada Gaming Commission the combined business “allows us to explore new opportunities that we couldn’t in the past.”

Golden Entertainment has 2,100 employees in Nevada and will be headquartered in Las Vegas. Family-owned Sartini Gaming is also licensed to operate a slot machine route in Montana.

Lakes Entertainment Chairman and CEO Lyle Berman will join the new corporate board and has a three-year consulting agreement. Lakes President and CFO Tim Cope will be a board member and consultant.

“Our cash along with the Rocky Gap Casino, when combined with the diverse operations of Golden Gaming, provides an exciting growth opportunity for our existing and future shareholders,” Berman said in a statement. “The combined company’s refinanced debt will provide an immediate benefit in company net income and free cash flow.”

Sartini will chair Golden Entertainment’s board. The company announced three new board members Monday; Nevada State Sen. Mark Lipparelli, a former chairman of the Gaming Control Board; Robert Miodunski, former CEO of American Gaming Systems and Alliance Gaming; and Terrence Wright, majority owner of Westcor Land Title Insurance Co.

Golden Entertainment also announced the closing of a $160 million credit agreement, which includes a $120 million loan that was fully drawn at closing, and a $40 million revolving credit line, of which $25 million was drawn at closing. Golden Entertainment has $145 million of long-term debt.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Follow @howardstutz on Twitter.

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