Fact checked by Wilbur Thompson.
Century Casinos has announced a definitive agreement with VICI Properties for the acquisition of real estate assets in Alberta. The properties included in the deal are Century Casino & Hotel Edmonton, Century Casino St. Albert, Century Mile Racetrack and Casino, and Century Downs Racetrack and Casino. VICI Properties will purchase these assets for a total of CA$221.7 million in cash.
As a prominent gambling entertainment company, Century Casinos owns and operates various gaming properties in Canada and the US. Currently, they hold a 75% ownership stake in Century Downs Racetrack and Casino in Calgary, Alberta. Additionally, Century Casinos has an agreement in place to acquire 100% of the operations of Rocky Gap Casino Resorts in Maryland, US.
Under the terms of the agreement, VICI Properties will acquire the four casino locations at an average price of CA$ 221.7 million based on the exchange rate of May 16, 2023. Century Casinos’ subsidiaries will receive CA$192.3 million, while approximately CA$29.4 million will be used to acquire the fee simple real estate interest in Century Downs.
Upon the completion of the transaction, the Century portfolio in Canada will be added to the triple-net master lease agreement between VICI subsidiaries and a Century subsidiary. This will result in an annual rent increase of CA$ 17.3 million, reflecting an implied acquisition capitalization rate of 7.8%. The property-level rent coverage ratio under Master Lease is expected to be approximately 2.0x.
Furthermore, the term of the Master Lease will be extended. After the transaction is finalized, the lease will have a full 15-year initial base lease term, with four 5-year renewal options. Century Casinos will continue to guarantee the company’s obligations under the Master Lease.
It is important to note that the agreement is still subject to customary regulatory approvals and closing conditions. The expected completion date is in the second half of 2023.
It is worth mentioning that in early 2023, VICI Properties had already expanded its presence in Alberta by entering into a purchase agreement for four properties owned by Pure Canadian Gaming Corporation. These properties were Pure Casino Edmonton, Pure Casino Yellowhead, Pure Casino Calgary, and Pure Casino Lethbridge.