Red Rock Resorts, Inc. ("Red Rock Resorts", "we" or the
"Company") (NASDAQ: RRR) today announced that Station Casinos LLC
has entered into a definitive agreement to acquire the Palms Casino
Resort (the "Palms") in Las Vegas, Nevada for total cash
consideration of $312.5 million.
“With the acquisition of the Palms we gain a leading gaming
asset in Las Vegas with key strategic benefits in the Las Vegas
locals market and close proximity to the Las Vegas Strip,” said
Marc Falcone, Executive Vice President, Chief Financial Officer and
Treasurer of Red Rock Resorts. “With its appeal to both Las Vegas
residents and tourists alike, the Palms is a hybrid gaming property
that is uniquely positioned to benefit from the strong economic
trends in Southern Nevada and record visitation levels in Las
Vegas. With our experience owning and operating other hybrid
offerings in Las Vegas, it is a compelling strategic addition to
our portfolio of properties and we look forward to welcoming the
Palms’ team members to our Company.”
“We are very proud of our team members for their hard work,
dedication and commitment to guest service and the community,” said
Palms Chief Executive Officer Todd Greenberg. “We are extremely
excited for all the great opportunities our team members will have
with Red Rock Resorts and Station Casinos.”
Factoring in anticipated synergies, the Company estimates that
the Palms will generate $35 million in EBITDA during the Company’s
first full year of ownership, resulting in an implied multiple of
8.8 times EBITDA for the transaction. The Company expects the
acquisition to be accretive to earnings per share and free cash
flow positive in first full year of operations.
Located directly across I-15 from the core of the Las Vegas
Strip, Palms features a 95,000-square-foot casino with
approximately 1,250 slots and 48 table games, a race and
sportsbook, approximately 710 hotel rooms across two towers with 85
suites and 19 penthouses, 599 AAA Four Diamond award-winning
condos, 15 fine dining and casual restaurants (including the
award-winning N9NE Steakhouse and Nova Italiano), 60,000
square-feet of meeting and convention space, Ghostbar Nightclub,
the 2,500 seat Pearl Theater, luxury spa, two acre Palms Pool and
year-round Palms Place Pool, and a 14 screen Brenden Theatres &
IMAX movieplex.
The transaction is expected to close during the third quarter of
2016, subject to the satisfaction of customary closing conditions,
including the receipt of all required gaming approvals and the
expiration of the waiting period under the Hart-Scott-Rodino
Act.
Milbank, Tweed, Hadley & McCloy LLP served as legal advisor
to Red Rock Resorts, Inc. for the transaction. Macquarie Capital
served as financial advisor and Willkie Farr & Gallagher LLP
served as legal advisor to FP Holdings L.P. dba Palms Casino
Resort.
The Company will discuss the transaction during its scheduled
first quarter 2016 earnings conference call on Thursday, May 12 at
4:30 p.m. ET.
About Red Rock Resorts
Red Rock Resorts manages and owns a significant indirect equity
interest in Station Casinos LLC (“Station”). Station is the leading
provider of gaming and entertainment to the residents of Las Vegas,
Nevada. Station’s properties, which are located throughout the Las
Vegas valley, are regional entertainment destinations and include
various amenities, including numerous restaurants, entertainment
venues, movie theaters, bowling and convention/banquet space, as
well as traditional casino gaming offerings such as video poker,
slot machines, table games, bingo and race and sports wagering.
Station owns and operates Red Rock Casino Resort Spa, Green Valley
Ranch Resort Spa Casino, Palace Station Hotel & Casino, Boulder
Station Hotel & Casino, Sunset Station Hotel & Casino,
Santa Fe Station Hotel & Casino, Texas Station Gambling Hall
& Hotel, Fiesta Rancho Casino Hotel, Fiesta Henderson Casino
Hotel, Wildfire Rancho, Wildfire Boulder, Wild Wild West Gambling
Hall & Hotel, Wildfire Sunset, Wildfire Valley View, Wildfire
Anthem and Wildfire Lake Mead. Station also owns a 50% interest in
Barley’s Casino & Brewing Company, Wildfire Casino & Lanes
and The Greens. In addition, Station is the manager of Graton
Resort & Casino in northern California and owns a 50% interest
in MPM Enterprises, L.L.C., which is the manager of Gun Lake Casino
in southwestern Michigan.
Forward-Looking Statements
This press release contains “forward-looking” statements and
“safe harbor statements” within the meaning of the Private
Securities Litigation Reform Act of 1995 that involve risks and/or
uncertainties, including those described in the Company's public
filings with the Securities and Exchange Commission(without
limitation) statements regarding the transactions contemplated by
the agreement to acquire the Palms, our expectations regarding the
timing of closing, the potential benefits to be achieved from the
acquisition of the Palms, including EBITDA expectations,
expectations regarding the Palms being free cash flow positive and
accretive to our earnings, expected cost synergies, and any
statements or assumptions underlying any of the foregoing. These
forward-looking statements are based upon our current beliefs and
expectations and involve certain risks and uncertainties, including
(without limitation) the possibility that the transaction does not
close on the expected terms (or at all), or that we are unable to
successfully integrate the Palms with our existing operations, or
realize the expected synergies, or that the Palms will be cash flow
positive or accretive to our earnings as anticipated.
Forward-looking statements may be identified by the use of words
such as “anticipate”, “believe”, “expect”, “estimate”, “plan”,
“outlook”, and “project” and other similar expressions that predict
or indicate future events or trends or that are not statements of
historical matters. Forward-looking statements should not be read
as a guarantee of future performance or results, and will not
necessarily be accurate indications of the times at, or by, which
such performance or results will be achieved. Forward-looking
statements are based on historical information available at the
time the statements are made and are based on management’s
reasonable belief or expectations with respect to future events,
and are subject to risks and uncertainties, many of which are
beyond the Company’s control, that could cause actual performance
or results to differ materially from the belief or expectations
expressed in or suggested by the forward-looking statements.
Forward-looking statements speak only as of the date on which they
are made and the Company undertakes no obligation to update any
forward-looking statement to reflect future events, developments or
otherwise, except as may be required by applicable law. Investors
are referred to the Company’s registration statement for additional
information regarding the risks and uncertainties that may cause
actual results to differ materially from those expressed in any
forward-looking statement.
We do not provide a reconciliation of forward-looking non-GAAP
financial measures due to our inability to project special charges
and certain expenses.
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version on businesswire.com: http://www.businesswire.com/news/home/20160510006951/en/
Red Rock Resorts, Inc.Daniel FoleyVice President of Finance
& Investor Relations702-409-5030orLori NelsonVice President of
Corporate Communications702-495-4248
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