Golden Nugget Parent Company Reaches SPAC Deal to go Public

Golden Nugget Parent Company Reaches SPAC Deal to go Public
© USA Today

Tilman Fertitta is getting into the public markets with a splash. The Houston-based billionaire who is sole owner of Fertitta Entertainment — the parent company of Golden Nugget/Landry's — will be joining his vast private company with a special purpose acquisition company named FAST Acquisition Company in order to take the hospitality and gambling giant public.

FAST, currently traded on the NYSE, is co-headed by Doug Jacob and Sandy Beall. The definitive merger agreement was announced Monday in a news release and is expected to close in the second quarter of 2021.

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The transaction implies an enterprise valuation for Golden Nugget/Landry's of approximately $6.6 billion. Institutional shareholders have committed to invest approximately $1.2 billion in the form of a PIPE (private investment in public equity) at a price of $10 a share of common stock of FAST immediately prior to the closing of the transaction, the news release said. The new public company expects to use the proceeds from the transaction to help it move more quickly on growth initiatives, to reduce debt and for general corporate purposes.

Fertitta, the controlling hand at Fertitta Entertainment, will serve as chairman, president and CEO of the new publicly traded company, the release said. Fertitta will also be the company's largest shareholder with an approximately 60% interest in the company and stock valued upon the closing of the transaction in excess of $2 billion dollars. No changes to the current Golden Nugget/Landry’s management team are anticipated.

Fertitta’s Own SPAC

Recently, Fertitta returned to the public markets in a limited way when he spun off the online portion of his gambling company in a SPAC, Golden Nugget Online Gaming, Inc., (Nasdaq: GNOG). The SPAC was notable in that Fertitta controlled both the gambling unit and the SPAC itself. The new deal will include voting control and ownership by the new public company of approximately 31 million shares or nearly half of all outstanding shares in Golden Nugget Online.

Fertitta summed up the newest move in the release: "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."

Golden Nugget Market Leader in NJ

Fertitta, also the owner of the NBA’s Houston Rockets and a television personality, has had a strong run in the hospitality/gaming sector. He took the foundering Trump Marina in Atlantic City and with judicious improvement in the property positioned it as a competitive performer in a challenging casino atmosphere. Then, when online casino gaming was legalized in New Jersey, his Golden Nugget operation became a market leader in that segment.

Like all hospitality and gaming companies in the pandemic era, Fertitta’s companies have faced challenges but continue to be competitive among peers.

"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," FAST’s Jacob said in the release. "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."

Gaming SPACs Take Off

Using a SPAC to enter the public markets became especially popular in 2020 with several gaming sector companies, such as DraftKings, Rush Street Interactive and Genius Sports Group, making such a move.

"After I compared the opportunities provided by a transaction with FAST, versus the traditional IPO route, it became abundantly clear that we could access the capital markets with more certainty and speed if we did a deal with FAST,” Fertitta said. “Working with Doug (Jacob) and Sandy (Beall) has been a pleasure, and I truly appreciate their time and contribution to this process. At the end of the day, the decision to do a deal with FAST was a no-brainer."

Golden Nugget/Landry's is a multinational, diversified gaming, restaurant, hospitality, and entertainment company based in Houston, the release said. Its gaming division includes the Golden Nugget Hotel and Casino concept, with locations in Las Vegas and Laughlin, Nev., Atlantic City, N.J., Biloxi, Miss., and Lake Charles, La. On the restaurant side, just some of the company’s brand names are: Del Frisco's, Landry's Seafood House, Bubba Gump Shrimp Co., Rainforest Cafe, Morton's The Steakhouse, McCormick & Schmick's Seafood, Chart House and Joe's Crab Shack.

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