Isle of Capri Casinos, Inc. announced that it has entered into a definitive agreement to sell the Isle of Capri Casino Hotel Lake Charles to an affiliate of Laguna Development Corporation ("LDC"), a Pueblo of Laguna-owned business based in Albuquerque, New Mexico.
Under the terms of the agreement, Kicks Entertainment, LLC, a newly formed entity owned by LDC and Eagle Holdings, LLLP, will purchase Isle of Capri Casino Hotel Lake Charles for cash consideration of approximately $134.5 million, which represents 7.8x fiscal 2016 Adjusted EBITDA, subject to a customary working capital adjustment.
Eric Hausler, chief executive officer of Isle of Capri Casinos, 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."
Isle of Capri Casino Hotel Lake Charles will be accounted for as discontinued operations beginning in the fiscal 2017 second quarter. The sale is expected to close in late fiscal 2017/early fiscal 2018, subject to the approval of the Louisiana Gaming Control Board, the expiration or termination of the waiting period under the Hart-Scott-Rodino Act, as well as customary closing conditions.