Century Casinos Inc. has officially completed the sale of its land-based casino holdings in Edmonton and Calgary to VICI Properties.
In a statement released on Sept. 6, Century Casinos announced that the deal, which first took shape in May, is now final. As part of the $221.7 million sale-leaseback agreement, VICI will acquire Century’s four Alberta casino properties:
- Century Casino & Hotel Edmonton
- Century Casino St. Albert
- Century Mile Racetrack and Casino
- Century Downs Racetrack and Casino
Specifically, VICI is financing the purchase with proceeds from a partial settlement of forward equity sale agreements and capital from an existing revolving credit facility.
Transaction fortifies long-term relationship between entities
For its role as seller, Century was able to retain about $154.5 million of the purchase price after accounting for various expenses and taxes associated with the sale. These include selling expenses, Canadian and US taxes, and additional proceeds going to the minority owners of Century Downs.
As a result of the deal, Century’s Canadian Casino portfolio is now part of the present triple-net master lease agreement between subsidiaries of VICI and subsidiaries of Century. Further, annual rent will increase by $17.3 million or 7.8% of the acquisition cost. The agreement also extended the master lease term to 15 years, with the option for four 5-year renewals.
Finally, the annual rent escalator pertaining to Century’s Canadian holdings is capped at 2.5%.
Sale follows Century’s peculiar, yet strong Q2 performance
Both VICI and Century released their results for the second quarter of 2023 within the last two months.
On one hand, VICI reported revenue growth of 35.5% year-over-year, totalling nearly $900 million ($898.2 to be exact). On the other, Century generated record revenue of $136.8 million, despite sustaining a 96.3% decline in net profit.
Digging deeper into that gaudy net profit number will show that Canadian revenue only experienced a one percent decrease. That said, Century brass is looking forward to working with VICI and continuing operations in Canada.
“We are pleased to extend our good partnership with VICI to our Canada portfolio,” said Erwin Haitzmann and Peter Hoetzinger, co-chief executive officers of Century Casinos. “This transaction provides us with the ability to pay down our debt and with greater financial flexibility as we continue to grow.”