(PRESS RELEASE) -- Golden Entertainment, Inc. announced that it entered into definitive agreements to divest its distributed gaming operations in Nevada and Montana for aggregate cash consideration of $322.5 million, plus $39 million of estimated purchased cash at closing. Pursuant to the terms of the agreements, J&J Ventures Gaming, LLC (“J&J Gaming”) will acquire Golden’s Distributed Gaming Operations in Nevada for $213.5 million plus an estimated $34 million of purchased cash and Golden’s Distributed Gaming Operations in Montana for $109 million plus an estimated $5 million of purchased cash, subject to customary working capital adjustments.
In addition, Golden will enter into a five-year agreement with J&J Gaming under which J&J Gaming will support the gaming operations of Golden’s branded tavern locations in Nevada at financial terms consistent with the Company’s past practice.
The aggregate cash consideration plus purchased cash represents a multiple of approximately 9.0x of the Adjusted EBITDA for Golden’s Distributed Gaming segment for the year ended December 31, 2022 of $44 million, net of $3.8 million of corporate costs allocated to the Company’s Distributed Gaming segment.
“Our leading Distributed Gaming Operations in Nevada and Montana were built over the last 20 years through the hard work and dedication of our team members who provide exceptional service and support to our valued route partners,” said Blake Sartini, Chairman and Chief Executive Officer of Golden. “We believe this transaction will provide further success for our route partners through sharing of best practices and new technology. We anticipate our Distributed Gaming team members will continue to serve our route partners with the same dedication under J&J Gaming’s ownership. Our confidence in J&J Gaming’s future success is highlighted by our new long-term agreement with J&J Gaming to service Golden’s wholly owned tavern portfolio. For Golden, these transactions will allow us to focus our management team and capital on our portfolio of wholly owned casinos and taverns in Nevada and create additional value for our shareholders.”
Established almost 100 years ago, J&J Gaming is a privately held business and the leading distributed gaming operator in Illinois, with related operations in several other states.
The transactions are expected to close prior to yearend, subject to customary regulatory approvals and closing conditions. Latham & Watkins LLP is acting as legal counsel to Golden in connection with the transactions.