Riviera Holdings Corp. of Las Vegas is selling its casino in Black Hawk, Colo., for $76 million to Monarch Casino & Resort Inc. of Reno, owner of the Atlantis Casino Resort Spa in Reno, the companies announced.
"This transaction is a true win-win for everyone involved. Divesting the Black Hawk property allows us to focus on turning around the historic Riviera Las Vegas," Andy Choy, CEO of Riviera Holdings, said in a statement. "Additionally, the employees of the Riviera Black Hawk will have access to the resources they need to take that property to the next level."
This was the first major deal for Riviera Holdings since it emerged from bankruptcy this spring in a deal engineered by hotelier Barry Sternlicht.
The companies didn't immediately say whether the Black Hawk property would keep the Riviera name and what Riviera Holdings intends to do with the sales proceeds.
The Colorado property, opened in February 2000, has some 750 slot machines, eight table games, a buffet and a 500-space parking structure. Riviera Black Hawk, about 40 miles west of Denver, is the first casino encountered by visitors arriving from Denver on Highway 119.
The Black Hawk casino generated net revenue of $9.9 million in the second quarter vs. $21.6 million from the larger Riviera Las Vegas, which has a hotel with 2,075 rooms, Riviera said in its financial report.
The companies said that for the 12 months ended Aug. 31, Riviera Black Hawk had net revenue of $39.6 million and adjusted EBITDA of $10.3 million and that Monarch expects the deal to immediately boost its earnings.
EBITDA means earnings before interest, taxes, depreciation and amortization.
"Today's announcement is an important milestone for us. Despite the significant challenges posed by the economy over the last several years, we have successfully positioned Monarch to take advantage of what we believe to be an attractive growth opportunity," John Farahi, co-chairman and CEO of Monarch, said in the statement. "Our decision to acquire this particular property was influenced by a combination of factors, including our desire for growth through geographic diversification, the Riviera Black Hawk's close proximity to the Denver market, its relatively favorable regulatory environment and our ability to maximize revenue potential by applying our operational expertise at a facility whose parent company recently emerged from bankruptcy. We look forward to welcoming the Riviera Black Hawk team of approximately 250 employees to the Monarch family."