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ACQUISITION OF SILVER SLIPPER CASINO
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Sep. 30, 2012
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| Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ACQUISITION OF SILVER SLIPPER CASINO |
On March 30, 2012, we entered into a Membership Interest Purchase Agreement with Silver Slipper Casino Venture, LLC to acquire all of the outstanding membership interest of the entity operating the Silver Slipper Casino in Bay St. Louis, Mississippi. The purchase price was approximately $70.0 million, exclusive of estimated cash, net working capital balances, fees and expenses and other adjustments as customary, as of October 1, 2012.
On October 1, 2012, we closed on the acquisition of all of the equity membership interests in Silver Slipper Casino Venture LLC dba Silver Slipper Casino located in Bay St. Louis, Hancock County, Mississippi. The purchase price of approximately $70.0 million, exclusive of cash and working capital in the amount $6.7 million and $2.8 million, respectively, was funded by a $50.0 million first lien term loan provided by Capital One Bank, N.A. as administrative agent and the lenders identified in the First Lien Credit Agreement dated June 29, 2012 and a $20.0 million second lien term loan provided by ABC Funding LLC as administrative agent and the lenders identified in the Second Lien Credit Agreement dated October 1, 2012, as discussed in Note 7. The $5.0 million revolving loan under the First Lien Credit Agreement remains undrawn and available. The First and Second Lien Credit Agreements are secured by substantially all of our assets and therefore, our wholly-owned subsidiaries guarantee our obligation under the agreements. The Second Lien Credit Agreement is subject to the lien of the First Lien Credit agreement.
The Silver Slipper features 37,000 square feet of gaming space, including approximately 1,000 slots, 26 tables, a poker room, three restaurants and two bars. The property draws heavily from the New Orleans metropolitan area and other communities in southern Louisiana and southwestern Mississippi.
Through September 30, 2012 and December 31, 2011, we had incurred $0.1 million and $0.0 million in Silver Slipper acquisition related expenses, respectively, which are included in project development and acquisition expense. In conjunction with closing on the First Lien Credit Agreement, we incurred $0.9 million in financing related fees, which are located on the balance sheet under loan fees.
As of September 30, 2012, we had $9.2 million in long-term deposits, which represented our cash payment held in escrow related to the purchase of the Silver Slipper, included in the long-term deposits line item on the balance sheet.
The initial accounting for this purchase which was closed on October 1, 2012 is not yet complete. The amounts below are provisional amounts based on drafts of a valuation study which has not yet been finalized and is subject to adjustment and estimated purchase price adjustments. The purchase price is expected to be allocated in the fourth quarter of 2012 as follows (in millions):
The fair values of these acquired identifiable assets are expected to be finalized upon receipt of the final valuation and adjustments. The goodwill is the excess purchase price over the assets purchased and includes the assembled workforce of the Silver Slipper. The valuation above estimates a net working capital amount of $2.8 million, although the purchase agreement states the seller and purchaser will have up to 60 days to review the closing net working capital and therefore, changes in the working capital may be made.
The following unaudited, condensed consolidated pro forma data summarizes our results of operations for the periods indicated as if the acquisitions had occurred as of January 1, 2011. This unaudited pro forma consolidated financial information is not necessarily indicative of what our actual results would have been had the acquisition been completed on that date, or of future financial results. The estimated net income attributable to the Company and the net income per share have been adjusted for Silver Slipper’s effective tax rate in the State of Mississippi.
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