Caesars Entertainment has sold four casinos to its affiliate Caesars Growth Partner for $2.2 billion.
The agreement includes an assumed debt of $185 million, as well as project capital expenditures of $223 million. The transaction will most probably close in the second quarter of 2014, when Caesars Growth Partner will get three casinos in Las Vegas – Bally’s, the Cromwell and the Quad Resort – as well as Harrah’s in New Orleans.
Casino profits have been soaring lately, but several states still believe the industry can generate significant profits and are handing out new licenses under American gambling laws. Meanwhile, casino developers are making efforts to invest in their properties, hoping that this will attract more customers. Caesars Acquisition is determined to spend $223 million in the renovation of the Quad Resort & Casino.
Investing in network growth
The newly-bought properties will be managed by Caesars Entertainment and its affiliates. This will allow continued integration with the Total Rewards network. According to recent gambling news, Caesars Growth Partners will retain 50% stake of the management fee revenues.
“Since being taken private near the beginning of the global financial crisis, we have faced an incredibly challenging business environment and a highly leveraged capital structure,” Caesars Entertainment chief Gary W. Loveman told reporters.
“Despite these obstacles, we have invested significantly in the growth of our network and the enhancement of our assets while concurrently deploying a wide array of financial and operational tools to manage the company’s capital structure and create value.”