Laguna Development Bets $135M on Louisiana Casino Hotel
- Aug 24, 2016
Westlake, La.—In an effort to boost its holdings beyond New Mexico, Laguna Development Corp.’s newly formed Kicks Entertainment unit has agreed to buy the Isle of Capri Casino Hotel Lake Charles in Westlake, La., for $134.5 million from Isle of Capri Casinos Inc.
Laguna Development is a wholly owned subsidiary of the Pueblo of Laguna and the third largest casino operator in New Mexico. Based in Albuquerque, N.M., and the Laguna Pueblo Indian Reservation, the company currently manages the Route 66 Casino Hotel outside Albuquerque, the Dancing Eagle Casino near Grants, N.M., and a truck stop casino, Casino Express, as well as several travel centers and convenience stores.
“Our acquisition of the Isle of Capri Casino in Lake Charles is the culmination of a two-year business development effort to expand LDC both within and outside of New Mexico,” LDC President & CEO Jerry Smith said in a prepared statement. “Lake Charles is Louisiana’s largest casino market. With our operating principals of quality, service and value we expect to continue to generate solid financial results for our owners and investors.”
Skip Sayre, chief of sales and marketing for LDC, told Albuquerque Business First that company officials, shareholders and the 8,000 residents of the Laguna pueblo agreed the LDC needed to expand outside the state because of New Mexico’s sluggish economy. They felt Isle of Capri Casino Lake Charles was a good fit for LDC.
Isle of Capri Casinos, a St. Louis-based gaming and entertainment company with properties in seven states, has owned the Louisiana property for more than two decades. In June, the company opened a new $60 million, land-based casino in Bettendorf, Iowa. That casino has approximately 1,000 slot machines, 19 table games and two restaurants, with a third slated to open late this year.
“This transaction provides us with an opportunity to unlock significant value for our shareholders,” Eric Hausler, CEO of Isle of Capri Casinos, said of the Louisiana casino sale in a prepared statement. “On a pro forma basis, we expect the transaction to increase Adjusted EBITDA margins, while further deleveraging our balance sheet. Following the completion of the sale, we intend to use the cash proceeds we receive from this transaction to reduce debt and for other corporate purposes.”
In addition to the customary closing conditions, the sale must be approved by the Louisiana Gaming Control Board. The deal is expected to be finalized in early 2017.
“While we work on a smooth transition to Kicks Entertainment LLC, our focus remains on providing our customers with the great experiences they have come to expect from Isle of Capri Casino Hotel Lake Charles,” Hausler said.
The planned acquisition includes a 50,000-square-foot riverboat casino, 492 hotel rooms, various food and beverage outlets, covered parking and other amenities. The rooms are spread among two hotels—the Tower and Inn at the Isle. The casino features more than 1,200 slot machines and 40 table games. The facilities also have 13,500 square feet in meeting space, including a 4,000-square-foot ballroom.
Rice, Voelker LLC acted as financial advisor and Duane Morris LLP as legal counsel for LDC. Baker, Donelson, Bearman, Caldwell & Berkowitz PC was local and regulatory counsel for LDC for the acquisition.