Kicks start investment for Louisiana acquisition

Kicks start investment for Louisiana acquisition

Wednesday, August 24, 2016
Isle of Capri has agreed to sell Lake Charles business to Kicks Entertainment

The new owner of the Isle of Capri Casino Hotel Lake Charles in Louisiana is planning to invest in the site by adding new slots, new décor and more food options.

Isle of Capri has agreed to sell the casino to Kicks Entertainment, a newly formed division of New Mexico developer Laguna Development Corporation (LDC) for US$134.5m in cash. The deal is subject to approval by the Louisiana Gaming Control Board.

LDC has a handful of New Mexico gaming interests - Dancing Eagle Casino in Grants, and the Route 66 Casino and Casino Xpress casinos both in Albuquerque, and is stretching out into Louisiana's Westlake with this acquisition.

LDC spokesperson Skip Sayre said that although the casino was older than some of the competitors in the local market, it still held its own. “It has a certain part of the market share, a certain kind of customer that this brand appeals to. First thing is we keep those customers and keep them happy, and then offer other opportunities as far as our products and services that will allow us to grow the business.”

It seems that the takeover will also safeguard almost 1,000 jobs at the casino. “We want them to stay with us,” Sayre told new outlets. “We’re not looking to come in and make a lot of management or staffing changes. Employees that are in good standing when the transaction does close in several months, they will have the opportunity to stay if they want to do that.”

Meanwhile Isle of Capri Casinos CEO Eric Hausler intends to use the windfall from the disposal of a casino which required some extra investment to help improve the books for the group’s remaining 13 casino operations.

He commented: “This transaction provides us with an opportunity to unlock significant value for our shareholders. On a pro forma basis, we expect the transaction to increase Adjusted EBITDA margins, while further deleveraging our balance sheet. Following the completion of the sale, we intend to use the cash proceeds we receive from this transaction to reduce debt and for other corporate purposes.

“We have enjoyed owning and operating Isle of Capri Casino Hotel Lake Charles for more than 20 years, and we appreciate the hard work and dedication of our team. While we work on a smooth transition to Kicks Entertainment, LLC, our focus remains on providing our customers with the great experiences they have come to expect from Isle of Capri Casino Hotel Lake Charles.”

Totally Gaming Says: A deal everyone seems happy with. Isle of Capri realises a 7.8x valuation on the casino’s fiscal 2016 Adjusted EBITDA, LDC gets a toe hold in the Westlake casino market at a stable property where a little investment could go a long way, and a workforce of 1,000 get new & engaged owners who want them to carry on doing the good work. The final piece in the jigsaw will be the green light from the Louisiana Gaming Control Board.

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