Eldorado Resorts, Inc. (NASDAQ: ERI) (“Eldorado,” “ERI,” or “the
Company”) announced today that it completed its previously announced
acquisition of Isle of Capri Casinos, Inc. (NASDAQ: ISLE) (“Isle of
Capri” or "Isle") in a cash and stock transaction. The combination
creates a premiere, diversified regional gaming platform with combined
annual revenue of more than $1.7 billion for the year ended December 31,
2016 for Eldorado and January 22, 2017 for Isle and adjusted EBITDA
(earnings before interest, taxes, depreciation and amortization) of
approximately $394 million for that period after giving effect to
identified cost synergies of approximately $35 million which are
expected to be realized over the next four quarters. The Company’s
shares will continue to trade on the NASDAQ Global Select Market under
the symbol “ERI.”
Pursuant to the terms of the Merger Agreement, Eldorado acquired all of
the outstanding shares of Isle of Capri for $23.00 in cash or 1.638
shares of Eldorado common stock, at the election of each Isle of Capri
shareholder. Isle of Capri shareholder elections were subject to
proration such that the outstanding shares of Isle common stock were
exchanged for aggregate consideration comprised of 58% cash, or $552.0
million, with the remaining 42% of the consideration paid to Isle of
Capri shareholders in the form of 28.5 million newly issued shares of
Eldorado common stock. Following the consummation of the merger,
Eldorado has approximately 75.6 million common shares outstanding. The
transaction is expected to be immediately accretive to Eldorado’s free
cash flow and diluted earnings per share (after giving effect to the
identified cost synergies as well as Isle’s recently completed sale of
Lady Luck Casino Marquette for $40 million and previously announced
divestiture of Isle of Capri Casino Hotel Lake Charles for $134.5
million which is expected to be completed later in 2017).
The Isle transaction adds twelve casino–resorts to Eldorado’s portfolio
and significantly expands its operational and geographic diversity.
Eldorado’s expanded property portfolio includes 19 properties in ten
states featuring approximately 20,000 slot machines and VLTs, more than
550 table games and over 6,500 hotel rooms.
Gary Carano, Chairman and Chief Executive Officer of Eldorado,
commented, “Our acquisition of Isle of Capri marks a significant
milestone in Eldorado’s history of growth through strategic, accretive
acquisitions. The combination significantly expands the scale of our
gaming operations, further diversifies our geographic reach into new
markets and minimizes market-specific risk.
“We are delighted to welcome the Isle shareholders and team members to
the Eldorado family. We believe that Eldorado is positioned for
continued growth with a portfolio of premiere regional gaming assets, a
solid balance sheet and an attractive weighted average cost of capital.
Our experience in integrating the MTR assets and Silver Legacy and
Circus Circus operations will serve us well as we add the Isle of Capri
assets to our operating base. We intend to implement our strategy of
focusing on margin enhancement and customer service and experiences
across the portfolio by marrying best practices from both companies. Led
by our gaming, hotel management and food and beverage teams with a
long-term record of operating execution and M&A integration, we believe
that Eldorado Resorts is positioned for near- and long-term success and
the creation of value for our shareholders.”
Tom Reeg, President and Chief Financial Officer of Eldorado, added, “The
financing for the transaction was executed at favorable rates that
should permit us to generate more incremental annual free cash flow than
we originally expected. With our experienced management team, operating
discipline and return-focused approach to capital expenditures, we
believe the acquisition represents another meaningful opportunity for
Eldorado Resorts and our existing and new shareholders.”
J.P. Morgan acted as exclusive financial advisor and Milbank Tweed
Hadley & McCloy LLP acted as legal counsel to Eldorado in connection
with the transaction. Credit Suisse acted as exclusive financial advisor
and Mayer Brown LLP acted as legal counsel to Isle of Capri in
connection with the transaction.
About Eldorado Resorts, Inc.
Eldorado Resorts is a leading casino entertainment company that owns and
operates nineteen properties in ten states, including Colorado, Florida,
Iowa, Louisiana, Mississippi, Missouri, Nevada, Ohio, Pennsylvania and
West Virginia. In aggregate, Eldorado’s properties feature approximately
20,000 slot machines and VLTs, more than 550 table games and over 6,500
hotel rooms. For more information, please visit www.eldoradoresorts.com.
Adjusted EBITDA is a non-GAAP measurement. Eldorado defines adjusted
EBITDA operating income (loss) before depreciation and amortization,
stock based compensation, (gain) loss on the sale or disposal of
property, equity in income of unconsolidated affiliate, acquisition
charges, S-1 expenses, severance expenses and other regulatory gaming
assessments, including the impact of change in reporting requirements.
Isle of Capri defines Adjusted EBITDA as "earnings from continuing
operations before interest and other non-operating income (expense),
income taxes, stock-based compensation, preopening expenses and
depreciation and amortization.
This press release includes “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements include statements regarding our strategies,
objectives and plans for future development or acquisitions of
properties or operations, as well as expectations, future operating
results and other information that is not historical information.
Although our expectations, beliefs and projections are expressed in good
faith and with what we believe is a reasonable basis, there can be no
assurance that these expectations, beliefs and projections will be
realized. There are a number of risks and uncertainties that could cause
our actual results to differ materially from those expressed in the
forward-looking statements. Such risks, uncertainties and other
important factors include, but are not limited to: Eldorado’s ability to
promptly and effectively integrate the business of Eldorado and Isle and
realize synergies resulting from the combined operations; our
substantial indebtedness and the impact of such obligations on our
operations and liquidity; competition; sensitivity of our operations to
reductions in discretionary consumer spending and changes in general
economic and market conditions; governmental regulations and increases
in gaming taxes and fees in jurisdictions in which we operate; and other
risks and uncertainties described in our reports on Form 10-K, Form 10-Q
and Form 8-K.
These forward-looking statements speak only as of the date of this press
release, even if subsequently made available on our website or
otherwise, and we do not intend to update publicly any forward-looking
statement as a result of new information, future events or otherwise,
except as may be required by law.
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