Landcadia Holdings II will acquire Golden Nugget Online Gaming (GNOG) after entering into a purchase agreement with current owner Tilman J Fertitta. Under the terms of the deal which was announced this week, GNOG will become only the second pure publicly traded online casino company in the US. 

The transaction is expected to close in the third quarter of this year, whereupon Landcadia II intends to change its name to Golden Nugget Online Gaming Inc and its Nasdaq trading symbol to GNOG.

Rich Handler, Co-Chairman of Landcadia II and CEO of Jefferies LLC, said: “GNOG is one of the best positioned companies to capitalize on this massive online gaming opportunity in the US. We at Jefferies couldn’t be more thrilled to partner with Tilman and bring this great opportunity to the public markets.” 

Golden Nugget is a household name throughout the US and its igaming business is a well-established leader in New Jersey, the largest online gaming market in North America. GNOG has obtained market access, subject to regulatory approval, to Pennsylvania and Michigan and anticipates launching its online casino brand in each of those new markets in early 2021. 

Fertitta will remain in place as GNOG’s Chairman and CEO while Thomas Winter, who was brought in to develop Golden Nugget’s online gaming business, will continue to serve as GNOG’s President.  

Fertitta commented: “Golden Nugget is one of the most time-honored brands in the gaming business today. When customers hear the name Golden Nugget, they know they are dealing with a trusted online gaming business. Thomas and his team have done a remarkable job, are the best in the industry, and with this transaction, will have access to growth capital to allow for the rapid expansion of the business.”    

The transaction values the combined company at an anticipated pro forma enterprise value of approximately $745m, or 6.1x GNOG’s estimated 2021 revenue of $122m. The consideration payable to the parent entity of GNOG will consist of a combination of cash and rollover equity in Landcadia II.  

Upon completion of the transaction Fertitta, Chairman and CEO, will, through the parent entity of GNOG, hold a controlling economic interest and a controlling voting interest in the combined company.  The combined company will have a dual-class share structure with super voting rights for Fertitta.

Landcadia II will be assuming $150m of GNOG debt and will pay down at closing an additional $150m of its debt, plus pay prepayment fees, transaction fees and expenses. Subject to redemptions, there is approximately $321m currently held in Landcadia II’s trust account. 

Upon payment of the purchase price, debt repayment and transaction fees and expenses, the combined company will have at least $80m on its consolidated balance sheet at closing and an anticipated pro forma equity market capitalization of nearly $700m.