Caesars Entertainment Corp (Nasdaq: CZR) has closed its acquisition of Centaur Holdings LLC, an Indianapolis, Indiana owner and operator of the Hoosier Park Racing and Casino and the Indiana Grand Racing and Casino.
The deal, announced last November, reflected a purchase price of US$1.7 billion. It provided exits to Canadian private equity firm Clairvest Group and Canadian hedge fund manager West Face Capital, which jointly invested in Centaur in 2010.
Clairvest said Clairvest Equity Partners IV received sale proceeds of about US$415 million at closing and is entitled to US$22 million in deferred consideration. For Fund IV, this represents a more than 14x multiple on its investment in Canadian dollars.
Clairvest Realizes Strong Return on Its Sale Of Centaur Gaming
Toronto, Ontario (July 16, 2018) – Further to a statement released on November 16, 2017, Clairvest Group Inc. (TSX: CVG) (“Clairvest”) today announced the closing of the sale of Centaur Holdings LLC (“Centaur Gaming” or the “Company”) to a subsidiary of Caesars Entertainment Corporation (NASDAQ:CZR) (“Caesars Entertainment”). The purchase price was US$1.7 billion, US$1.625 billion of which is due at closing and US$75 million of deferred consideration. Centaur Gaming is the owner and operator of the Hoosier Park Racing and Casino (“Hoosier Park”) based in Anderson, Indiana, and the Indiana Grand Racing and Casino (“Indiana Grand”) based in Shelbyville, Indiana.
Clairvest and Clairvest Equity Partners IV (“CEP IV”) made their initial investment in 2010 through the purchase of debt securities in Hoosier Park’s parent corporation at the time. Later, the Company was restructured and completed the acquisition of Indiana Grand in 2013. Through the acquisition of Indiana Grand, synergies of owning both properties, organic growth and positive regulatory changes, Centaur’s EBITDA grew by over three times to create one of the most sought-after gaming assets in North America.
Under terms of the sale, Clairvest and CEP IV received total sale proceeds of approximately US$415 million at closing which is subject to customary working capital adjustments and are entitled to US$22 million in deferred consideration over the next three years. On a standalone basis, CEP IV’s proceeds equate to over 11 times net invested capital in U.S dollars. On a Canadian dollar basis, CEP IV realized over 14x multiple on capital invested.
In addition to its original investment alongside CEP IV, Clairvest made an additional US$16 million investment in Centaur Gaming in 2016, for total investments of US$28 million. Total proceeds paid to Clairvest at closing were US$166 million, compared to the March 31 carrying value of US$149 million.
“The proceeds realized in this transaction are a result of the outstanding work by Centaur Gaming’s management team and the flawless execution of their vision of how to create value within Centaur Gaming,” noted Michael Wagman, President and Managing Director of Clairvest. “Thanks to our firm’s 15-year track record in the gaming industry, our team was able to make a unique investment in a very attractive gaming asset and support our partners in their value building efforts,” added Mr. Wagman.
“This has been a fantastic result for our team,” commented Rod Ratcliff, CEO of Centaur Gaming. “We thank Clairvest for their patience and trust as we worked to build Centaur Gaming to one of the top gaming operations in the United States.” added Mr. Ratcliff.
Director, Investor Relations and Marketing
Clairvest Group Inc.
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