Tuesday, April 16, 2024

Billionaire Tilman Fertitta creates entertainment empire in $ 6.7 billion Spac deal

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Houston billionaire Tilman Fertitta returns his business empire in public markets after a gap of more than a decade. Holding company Fertitta Entertainment, which includes Golden Nugget casinos and Landry restaurants, will be introduced through a reverse merger with a special purpose acquisition company.

The operation benefits from the enthusiasm of investors to Spac offers and values ​​Fertitta Entertainment, whose restaurant chains include Del Frisco’s and Morton’s, at $ 6.7 billion during a period of volatility for the gaming and restaurant industries.

Fertitta, which operates regional casinos in Nevada, Louisiana and Mississippi, has been shaken by the onset of the pandemic, according to an investor presentation accompanying the agreement. The group’s revenues fell about 40% in 2020, he said.

Mr. Fertitta’s personal empire also includes ownership of the Houston Rockets of the National Basketball Association and propelled him to entrepreneurial fame, with his own program on the CNBC business network. The Rockets are not included in the public transaction, however.

Fertitta Entertainment’s merger with Fast Acquisition, a blank check company that raised $ 200 million when it went public in August, will give Mr. Fertitta a nearly 60% stake worth more than $ 2 billion.

“In today’s opportunistic world, I have decided that in order to maximize the opportunities in the gaming, entertainment and hospitality industries, it is best to take my business public,” Mr. Fertitta in a statement. He will remain Chairman and CEO.

About three-quarters of the Fertitta Entertainment Group’s revenue – $ 3.41 billion in 2019, before the pandemic – comes from the restaurant industry, which was depleted during closures imposed by coronaviruses. Meanwhile, profits at the five regional casinos in the Golden Nugget division declined less sharply than those of major global operators such as Wynn and MGM.

In a presentation, the company said it was poised to benefit from the economic recovery, as weaker restaurants closed during the pandemic.

The Spac merger will result in Fertitta Entertainment’s second public listing, after Mr. Fertitta took over the private organization in 2010. He had considered merging Golden Nugget / Landry’s with Caesars Entertainment two years ago, but Caesars ultimately did. chose another bidder.

Nor is it Mr. Fertitta’s first connection with a Spac. At the end of last year, he parted ways with the mobile betting segment of his company, Golden Nugget Online Gaming, via a public listing with blank check company Lancadia Holdings. Fertitta Entertainment still owns voting control and ownership of approximately half of GNOG’s outstanding shares, valued at approximately $ 700 million.

Latest deal includes raising $ 1.24 billion in new equity from a group of unidentified investors, which will reduce the company’s debt to just over $ 3 billion .

Fast Acquisition, a Spac company founded by restaurant chain veterans Doug Jacob and Sandy Beall, will own 1% of public Fertitta Entertainment, while the undisclosed co-investor group will own 35% of the shares.

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