Las Vegas-based Affinity Gaming is on the hunt for an acquisition.
The merger would take place through Gaming & Hospitality Acquisition Corp., a blank-check company with plans to raise between $150 million and $172.5 million through an initial public offering.
“Our … strategy will be to identify, acquire and build a company in the gaming and hospitality sectors that complements the experience of our management team,” according to a Friday filing with the U.S. Securities and Exchange Commission.
Merger through an SPAC
Gaming & Hospitality Acquisition, which registered for an IPO on Friday, plans to merge with its sponsor, Affinity Gaming Holdings LLC, and at least one other company.
Z Capital-owned Affinity Gaming is the parent company of Silver Sevens casino in Las Vegas and seven other properties across Nevada, Iowa and Missouri, according to its website.
Blank-check companies such as Gaming & Hospitality Acquisition have no commercial operations. These entities — also referred to as special purpose acquisition companies, or SPACs — are formed solely to raise money through an initial public offering and merge with existing, operating companies.
This style of merger gives private operating companies a fast pass through the IPO process and offers the SPAC founders a stake in the newly acquired business.
Gaming & Hospitality Acquisition has not started any serious discussions, but SEC filings say it’s targeting gaming and hospitality businesses.
“We seek to acquire one or more businesses with assets that are fundamentally sound yet are underperforming their potential,” the filing reads. “We will look for opportunities where we can leverage our significant experience and expertise to help one or more businesses achieve long-term strategic and operational excellence.”
Target businesses may include gaming properties or businesses, properties owned by real estate investment trusts, distributed gaming platforms, online gaming or sports wagering companies or gaming technology companies.
The SPAC’s management team includes Z Capital President and CEO James Zenni and Affinity Gaming CEO Mary Beth Higgins.
Affinity Gaming has agreed to purchase more than $6.7 million worth of units. Additional units are set to be listed on the Nasdaq market under the symbol GHACU.
Major companies such as Virgin Galactic and Draftkings have gone public through SPACs within the last two years. Vegas Golden Knights owner Bill Foley also has a number of blank-check companies, one of which announced plans last month to merge with an online payments processing firm tied to big-name casino companies.