British gaming company Gala Coral said it had conditionally agreed to sell its Gala Casinos to local Rank Group Plc (LON:RNK) for GBP205m (USD329m/EUR255.6m).
Upon closing of the deal, Gala Coral will get GBP182.5m in cash and Rank will pay an additional GBP22.5m into escrow which will be provided in stages between completion and August 2015 pending satisfaction of certain conditions. Gala Coral said that it may use the proceeds to lower its leverage.
Under the agreement, Rank will receive 23 UK casinos and 3 non-operating licences, the vendor said. However, the deal excludes the casinos in Dundee and Gibraltar, the non-operating licence for the City of Westminster (London), the divisional and central management functions related to Gala Casinos Ltd, the branded online casino activities and the casino freehold properties owned by Gala Propco Three Ltd. Gala Coral added that Gala Casinos Ltd will remain the tenant of these freehold properties under Rank’s ownership.
Completion of the transaction is seen in September and pending Rank shareholders and regulatory approvals. Deutsche Bank served as an advisor to Gala Coral, the latter said.
The casinos being sold had revenue of GBP125.9m and club-level earnings before interest, taxes, depreciation and amortisation (EBITDA) of GBP25.7m for the 12 months to 7 April 2012.