Golden Nugget parent company to go public with SPAC merger

Golden Nugget’s parent company is set to go public on the New York Stock Exchange.

Fertitta Entertainment, the parent company of Landry’s, the operator of Golden Nugget, is set to go public on the New York Stock Exchange (NYSE) via a merger with Fast Acquisition Corporation, a special purpose acquisition company (SPAC).

The business was previously traded on the NYSE between 1993 and 2010, however, Fertitta acquired all of the outstanding shares in the business to take it private.

Going public

The deal will see Tilman Fertitta, the owner of Fertitta Entertainment, sell a minority stake in the business to investors. 

Fertitta will retain a 60% stake in the business, holding stock valued in excess of $2bn when the deal is closed. Fertitta will retain his role of chairman, president and chief executive.

By combining the business with Fast Acquisition the newly-listed business entity will retain voting control and ownership of roughly 31m shares in Golden Nugget Online Gaming, the online arm of the gambling operators’ operation.

Golden Nugget Online Gaming was previously spun off into its own entity and listed on the Nasdaq via a SPAC merger which was completed at the end of 2020.

The boards of directors for both businesses have unanimously approved the transaction which will require the approval of Fast’s stockholders and is subject to other customer closing conditions. These include the receipt of certain regulatory and gaming approvals. The transaction is expected to close in the second quarter of 2021.

In the announcement, Fertitta said: “I look forward to returning my Company to the public marketplace. After taking the Company private in 2010, we accomplished a lot. However, in today’s opportunistic world, I determined that in order to maximize the opportunities in the gaming, entertainment and hospitality sectors, it was preferable to take my Company public.

“We first began to explore going public in 2019, as we saw tremendous M&A deals hitting the market. However, the pandemic set these efforts back. FAST provided us with the perfect merger vehicle to allow us to take control of an already existing public company. FAST’s capital along with the equity investment from institutional shareholders will strengthen our balance sheet and allow us to pursue our acquisition strategy.”

Fertitta explained that the merger would allow Landry’s capital markets with more “certainty and speed” than a traditional IPO would.

Landry’s SPAC partner, Fast Acquisition, was formed by Doug Jacob and Sandy Beall, two executives in the restaurant industry. 

Speaking on the deal. Jacob said: “The hospitality industry is experiencing the greatest disruption of our lifetimes and Tilman and his team have remained the premiere gaming and restaurant operators in the country. We believe this diverse portfolio made up of full-service dining and entertainment concepts combined with pent-up consumer demand, will find continued success as a public company.”

Beall said: “We are excited and honored to participate with Tilman and help to sponsor his company’s return to being a public company.”

The SPAC’s chief brand officer, Eugene Remm, who is an entrepreneur and restaurateur, will serve on the combined entity’s board. Remm already works with Fertitta as a partner in the Catch Hospitality Group.

The combination implies a $6.6bn enterprise valuation for the combined entity which represents a 9.23 multiple on its predicted earnings of $648m for the 2022 financial year.

Gross proceeds from the merger will be made up of $200m cash held by Fast Acquisition following an IPO in August 2020. A further $1.2bn from institutional investors has been committed via a private investment in public equity transaction.

The proceeds will be used to help speed up business growth, cover general corporate purposes and reduce existing debt.

Reorganizational transactions

A series of organizational transactions relating to the SPAC combination will also be carried out. These will be done in order to separate certain businesses and assets that Fertitta will continue to own entirely.

Upon the closing of the deal, Ferittita will own 60% of the business while the Fast sponsors will hold a 1% stake in the business. 

Participants in the private investment in public equity transaction will hold 35% of the business and the remaining 4% will be held by public stockholders.

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