Red Rock ResortsInc.'s Station Casinos LLC unit entered into a definitive agreementto purchase the Palms Casino Resort in Las Vegas for a total cash considerationof $312.5 million.
The property features a 95,000-square-foot casino with approximately1,250 slots and 48 table games, a race and sports book, and approximately 710 hotelrooms across two towers with 85 suites and 19 penthouses, as well as 599 condosand 60,000 square-feet of meeting and convention space, among other amenities.
Red Rock expects the deal to be accretive to EPS and free-cash-flowpositive in its first full year of operations. The company expects the resort togenerate $35 million of EBITDA during its first full year of ownership, bringingthe implied transaction multiple to 8.8x EBITDA.
The transaction is expected to close during the third quarter,subject to the satisfaction of customary closing conditions, including the receiptof all required gaming approvals and the expiration of the waiting period underthe Hart-Scott-Rodino Act.
Milbank Tweed Hadley & McCloy LLP served as legal adviserto Red Rock. Macquarie Capital served as financial adviser and Willkie Farr &Gallagher LLP served as legal adviser to FP Holdings LP doing business as PalmsCasino Resort.