Gateway Casinos & Entertainment Ltd. has announced a merger with its largest shareholders in a deal worth $1.15 billion. The deal is expected to be finalized in the second quarter of 2020, and the newly formed entity will be listed on the New York Stock Exchange.
Gateway Casinos & Entertainment largest shareholders are Catalyst Capital Group and Leisure Acquisition Group. Catalyst Capital Group was formed in 2017, and its sole purpose is to acquire and reorganize business in gaming, recreational, travel, and lodging sectors. Now, Gateway will initiate the merging process.
According to the announcement made, the $1.15 billion transactions, will increase Gateway projected 2020 Adjusted EBITDA by a multiple of 7.5. Gateway is the largest casino operator in Canada and owns 26 gaming properties across Ontario, Alberta and British Columbia.
Gaming Activist Investor
According to Casino.org, HG Vora Capital Management, a popular gaming industry hedge fund, is behind Gateway and Leisure merger. The fund is supporting the merger by agreeing to inject $30 million equity in the entity that will be formed. That will increase HG Vora ownership to $100 million at Leisure. On 1st December 2017, HG had a stake at Leisure Acquisition Group reached $62.5 million, this gave the fund a right to approve or disapprove mergers.
HF Vora is a crucial player in the gaming industry and has shares in various gaming companies. The current holdings are as follows:
- Eldorado Resorts-5.57million shares
- Penn National-7.5 million shares
- The Stars Group-3.5 million shares
- Twin River-1.3 million shares
- Leisure Acquisition-7 million shares
- More Mergers and Acquisitions
Recently, the gaming industry has been floated with news of mergers and acquisitions. A few weeks ago, DraftKings announced a merger with Diamond Eagle Acquisition Corp. and SBTech. In September, William Hill also announced the acquisition of CGTechnology and finally not forgetting the largest merger of all, Eldorado Resorts and Caesars Entertainment. Thus, Gateway’s announcement is one of the latest moves in the gaming industry involving mergers and acquisitions.
