MGM Resorts International has reached an agreement with Cherokee Nation Entertainment Gaming Holdings for the sale of Gold Strike Tunica in a deal worth $450m.
Expected to close in H1 of 2023, the purchase agreement sees Cherokee Nation pay full in cash, subject to customary adjustments.
The price represents around 11x Gold Strike’s average adjusted EBITDA from 2019-2021. For the 12 months ending December 31, 2021, Gold Strike recorded net income of $81.1m and an adjusted property EBITDA of $115m.
“I want to thank all of our Gold Strike employees who have consistently delivered world-class gaming and entertainment experiences to our guests,” said Bill Hornbuckle, CEO & President, MGM Resorts International.
“Gold Strike is a wonderful property with a bright future ahead. Strategically, though, we decided to narrow our focus in Mississippi to a single resort – Beau Rivage – and dedicate more of our time and resources towards continuing to drive success at that leading, world-class resort and casino.”
Following the completion of the deal, MGM Resorts’ master lease agreement with VICI Properties, which currently includes Gold Strike, will be reduced by $40m.
MGM stated that it anticipates the net cash proceeds after taxes and legal fees to be around $350m.
“This is a great outcome for the company as we are able to reprioritize future capital expenditures toward opportunities that will enhance the customer experience at our other locations,” explained Jonathan Halkyard, CFO & Treasurer, MGM Resorts International.
“We appreciate VICI, as the real estate owner of Gold Strike, working constructively with CNE to facilitate a new lease agreement.”