SYS-CON MEDIA Authors: Jim Kaskade, Yeshim Deniz, Elizabeth White, Sean Houghton, Glenn Rossman

News Feed Item

Caesars Growth Partners to Acquire $2.2 Billion of Assets from Caesars Entertainment

Caesars Growth Partners to Commence $223 Million Renovation of The Quad

LAS VEGAS, March 3, 2014 /PRNewswire/ -- Caesars Acquisition Company (NASDAQ: CACQ) ("CAC") today announced that Caesars Growth Partners, LLC ("Growth Partners") has entered into a definitive agreement to acquire Bally's Las Vegas, The Cromwell (formerly Bill's Gamblin' Hall & Saloon), The Quad Resort & Casino ("The Quad") and Harrah's New Orleans from Caesars Entertainment Corporation (NASDAQ: CZR) ("Caesars Entertainment") for $2.2 billion including assumed debt of $185 million and committed project capital expenditures of $223 million, resulting in cash consideration of approximately $1.8 billion. The transaction has been unanimously recommended by independent special committees of the boards of directors of CAC, the managing member of Growth Partners, and Caesars Entertainment and approved by the boards of both companies.  The transaction is expected to close in the second quarter of 2014, subject to certain closing conditions, including the receipt of required regulatory approvals. 

Caesars Acquisition Company Logo

The transaction will facilitate new investment in these properties, some of which require considerable capital expenditures to realize their full potential. In addition, Growth Partners will retain a 50% interest in the management fee revenues to be received by certain subsidiaries of Caesars Entertainment Operating Company, Inc., a wholly-owned subsidiary of Caesars Entertainment, in connection with the management of Bally's Las Vegas, The Cromwell, The Quad (formerly Imperial Palace) and Harrah's New Orleans. With this transaction, CAC is also announcing a $223 million renovation of The Quad.  

"The acquisition of these assets further aligns Growth Partners' portfolio with attractive markets, especially Las Vegas," said Mitch Garber, chief executive officer of CAC. "Growth Partners is focused on acquiring and developing high-growth operating assets with strong value creation potential.  These four properties will strongly complement our existing portfolio, particularly Planet Hollywood and our interest in Horseshoe Baltimore, which will open later this year. All of these properties will continue to benefit from participation in the Total Rewards network."

The three Las Vegas properties in the transaction are strategically and geographically desirable, occupying space at the very heart of the Las Vegas Strip. The Cromwell will open later this year as the only standalone boutique hotel and casino on the Las Vegas Strip boasting celebrity chef Giada De Laurentiis' first Las Vegas outpost and serving as home to the new Drai's Beach Club - Nightclub featuring a one-of-a-kind rooftop pool. The Quad occupies a critically important space at the entrance to The LINQ development. The resort stands to generate increased hotel, hospitality and gaming revenue as a result of the planned upgrades. Bally's Las Vegas' prominent Strip locale is made even more desirable with the enhancements currently underway, including the recently completed renovation of the Jubilee Tower and the addition of Caesars Entertainment's Grand Bazaar retail center outside of the hotel. Harrah's New Orleans is a key asset that exemplifies Caesars Entertainment's city-integrated resort model in a compelling destination area.

The purchase terms were negotiated and recommended by special committees comprised of independent members of the boards of directors of Caesars Entertainment and CAC. Lazard served as financial advisor to the special committee of CAC and Skadden, Arps, Slate, Meagher & Flom LLP served as the committee's legal counsel.

Growth Partners has received commitments for financing associated with the purchase.

Quad Transformation

The transformation of The Quad will create a new design-inspired urban hotel combining boutique sensibilities with full scale resort amenities. The renovation of the property will integrate seamlessly into the collection of retail, dining and entertainment experiences offered at The LINQ. It will also include the complete remodeling of the guest rooms and common areas, the expansion of meeting spaces, the addition of new dining experiences and amenities, a transformation of the pool and spa, substantial infrastructure upgrades and completion of the exterior facade. The enhancements to the 2,308 room property follow $90 million of recent upgrades to many public spaces, the gaming floor and portions of the exterior facade.

"We envision the transformed property will serve as the perfect complement to Caesars Entertainment's newest entertainment and hospitality asset, The LINQ, which sits right next door," Garber said. "The LINQ was designed to appeal to a younger demographic that we are seeing travel to Las Vegas with greater frequency. It is our intent that The Quad hold a similar appeal and, together serve as the social hub on the Las Vegas Strip."

Guest room renovations will begin in the coming weeks when three of the resort's towers will close to accommodate remodeling. The resort's public spaces will remain open throughout the duration of the construction period with maximum precautions taken to minimize disruption to guests. The hotel and casino's full transformation is expected to be completed in the first half of 2015.

Conference Call Information
Caesars Acquisition Company (NASDAQ: CACQ) will host a joint conference call with Caesars Entertainment (NASDAQ: CZR) at 5:30 a.m. Pacific Time today, Monday, March 3, to discuss the transaction. The call will be accessible on the Investor Relations section of www.caesarsacquisitioncompany.com.

If you would like to ask questions and be an active participant in the call, you may dial (877) 637-3676, or (832) 412-1752 for international callers, and enter Conference ID 3889366 approximately 10 minutes before the call start time. A recording of the live call will be available on the Company's website for 90 days after the event.

About Caesars Growth Partners
Caesars Growth Partners is a casino asset and entertainment company focused on acquiring and developing a portfolio of high-growth operating assets and equity and debt investments in the gaming and interactive entertainment industry.  Through its two businesses—Interactive Entertainment and Casino Properties and Developments—Caesars Growth Partners will focus on acquiring or developing assets with strong value creation potential and leveraging interactive technology with its well-known online and mobile game portfolio and leading brands. Assets include Caesars Interactive Entertainment (with its social and mobile games, the World Series of Poker and regulated online real money gaming businesses), Planet Hollywood (located in Las Vegas, Nevada), and Horseshoe Baltimore (currently being developed by a joint venture).   Through its relationship with Caesars Entertainment (NASDAQ: CZR), Caesars Growth Partners has the ability to access Caesars Entertainment's  proven management expertise, brand equity, Total Rewards loyalty program and structural synergies.  For more information, please visit www.caesarsacquisitioncompany.com.

About Caesars Acquisition Company
Caesars Acquisition Company (NASDAQ: CACQ) was formed to make an equity investment in Caesars Growth Partners, LLC , a joint venture between CAC and Caesars Entertainment Corporation (NASDAQ: CZR), the world's most diversified casino entertainment provider and the most geographically diverse U.S. casino-entertainment company. CAC is Growth Partners' managing member and sole holder of all of its outstanding voting units.  For more information, please visit www.caesarsacquisitioncompany.com.

Forward Looking Information
This release contains or may contain "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. CAC has based these forward-looking statements on its current expectations about future events. Further, statements that include words such as "may," "will," "project," "might," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," "continue," or "pursue," or the negative of these words or other words or expressions of similar meaning may identify forward-looking statements. These forward-looking statements are found at various places throughout this release. These forward-looking statements, including, without limitation, those (i) relating to the purchase of the casinos named in this press release, (ii) relating to the renovation and transformation of the Quad, and (iii) relating to future actions, new projects, strategies, future performance, the outcome of contingencies such as legal proceedings, and future financial results, wherever they occur in this release, are necessarily estimates reflecting the best judgment of CAC's management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. These forward-looking statements should, therefore, be considered in light of various important factors set forth above and from time to time in CAC's filings with the Securities and Exchange Commission.

In addition to the risk factors set forth above, important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include without limitation:

  • the ability to satisfy the conditions to the closing with respect to the purchase of the casinos named in this press release, including receipt of required regulatory approvals and receipt of financing;
  • the purchase of the casinos named in this press release may not be consummated on the terms contemplated or at all;
  • access to financing to complete the transaction;
  • the ability to timely and cost-effectively integrate companies that Growth Partners acquires into its operations, including the four properties noted above;
  • construction factors, including delays, increased costs of labor and materials, availability of labor and materials, zoning issues, environmental restrictions, soil and water conditions, weather and other hazards, site access matters, and building permit issues, including construction of The Cromwell and the renovation of The Quad;
  • CAC and Growth Partners dependence on Caesars Entertainment and its subsidiaries to provide support and services, as well as Growth Partners' dependence on Caesars Entertainment's senior management's expertise and its participation in Caesars Entertainment's Total Rewards loyalty program;
  • the effects of a default by Caesars Entertainment on certain debt obligations;
  • Caesars Entertainment's interests may conflict with Growth Partners' interests and may possibly keep any or all potential development opportunities for itself;
  • the potential adverse effects if Caesars Entertainment or any of its subsidiaries were to file for bankruptcy;
  • the effects if a third party successfully challenges Caesars Entertainment or its affiliates ownership of, or right to use, the intellectual property owned or used by subsidiaries of Caesars Entertainment, which Caesars Interactive Entertainment, Inc. ("CIE") licenses for use in its businesses;
  • CIE's reliance on subsidiaries of Caesars Entertainment to obtain online gaming licenses in certain jurisdictions, such as New Jersey and Nevada;
  • the adverse effects on CAC's ability to comply with certain obligations imposed by federal securities law and certain debt arrangements if it is determined that Deloitte & Touche LLP was not independent of Caesars Entertainment or Growth Partners;
  • the difficulty of operating Growth Partners' business separately from Caesars Entertainment, including that managing that process effectively may consume a significant portion of management's time;
  • risks inherent in Growth Partners' business model and Growth Partners' short operating history;
  • Growth Partners' ability to realize the anticipated benefits of current or potential future acquisitions and the ability to timely and cost-effectively integrate companies that Growth Partners acquires into its operations;
  • the additional capital that Growth Partners may require to support business growth may not be available on acceptable terms, or at all;
  • the adverse effects of extensive governmental regulation and taxation policies applicable to Growth Partners;
  • the effects of local and national economic, credit and capital market conditions on the economy in general, and on the gaming industry in particular;
  • the sensitivity of Growth Partners'  business to reductions in discretionary consumer spending;
  • the new and rapidly changing industry in which Growth Partners operates, such as CIE's social and mobile games business and internet gaming business;
  • any failure to protect Growth Partners' trademarks or other intellectual property, such as CIE's ownership of the "World Series of Poker" trademark;
  • abnormal gaming holds ("gaming hold" is the amount of money that is retained by the casino from wagers by customers);
  • the effects of competition, including locations of competitors and operating and market competition, particularly the intense competition faced by the Planet Hollywood Resort & Casino, Bally's Las Vegas and The Quad (and will be faced by The Cromwell) from other hotel casino resorts in Las Vegas and that Harrah's New Orleans and Horseshoe Baltimore face from other regional casinos and resorts;
  • the uncertainty surrounding whether CIE's games, such as Slotomania, Bingo Blitz, and House of Fun, will retain their popularity;
  • CIE's ability to launch new games on new and emerging platforms;
  • CIE's reliance on a small portion of its total players for nearly all of its revenue from its social and mobile games;
  • Growth Partners' ability to expand into international markets in light of additional business, regulatory, operational, financial and economic risks associated with such expansion;
  • evolving regulations concerning the social and mobile games industry as well as data privacy, including, but not limited to, the effect of U.S. and foreign laws, some of which are unsettled and still developing;
  • the low barriers to entry and intense competition of social and mobile games industry could have adverse effect on CIE and Growth Partners;
  • evolving U.S. and foreign laws could subject CIE to claims and prevent CIE from providing its current games to players or to modify its games;
  • the effect on Growth Partners' business strategy if real money online poker is not legalized in states other than Delaware, Nevada or New Jersey in the United States or is legalized in an unfavorable manner; and
  • political and economic uncertainty created by terrorist attacks and other acts of war or hostility.

You are cautioned to not place undue reliance on these forward-looking statements, which speak only as of the date of this release. CAC undertakes no obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, except as required by law.

Logo - http://photos.prnewswire.com/prnh/20131118/LA19470LOGO

SOURCE Caesars Acquisition Company

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
The term culture has had a polarizing effect among DevOps supporters. Some propose that culture change is critical for success with DevOps, but are remiss to define culture. Some talk about a DevOps culture but then reference activities that could lead to culture change and there are those that talk about culture change as a set of behaviors that need to be adopted by those in IT. There is no question that businesses successful in adopting a DevOps mindset have seen departmental culture change, ...
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
The 4th International DevOps Summit, co-located with16th International Cloud Expo – being held June 9-11, 2015, at the Javits Center in New York City, NY – announces that its Call for Papers is now open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's large...
SYS-CON Media announced today that Skytap blog on "DevOps Journal" exceeded 84,000 story reads. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Noel Wurst is the managing content editor at Skytap. Skytap provides SaaS-based dev/test environments to the enterprise. Skytap solution removes the inefficiencies and constraints that comp...
SYS-CON Events announced today Isomorphic Software, the global leader in high-end, web-based business applications, will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Isomorphic Software is the global leader in high-end, web-based business applications. We develop, market, and support the SmartClient & Smart GWT HTML5/Ajax platform, combining the productivity and performance of traditional desktop software ...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, a...
Fundamentally, SDN is still mostly about network plumbing. While plumbing may be useful to tinker with, what you can do with your plumbing is far more intriguing. A rigid interpretation of SDN confines it to Layers 2 and 3, and that's reasonable. But SDN opens opportunities for novel constructions in Layers 4 to 7 that solve real operational problems in data centers. "Data center," in fact, might become anachronistic - data is everywhere, constantly on the move, seemingly always overflowing. Net...
SYS-CON Events announced today that Gridstore™, the leader in hyper-converged infrastructure purpose-built to optimize Microsoft workloads, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Gridstore™ is the leader in hyper-converged infrastructure purpose-built for Microsoft workloads and designed to accelerate applications in virtualized environments. Gridstore’s hyper-converged infrastructure is the ...
"ElasticBox is an enterprise company that makes it very easy for developers and IT ops to collaborate to develop, build and deploy applications on any cloud - private, public or hybrid," stated Monish Sharma, VP of Customer Success at ElasticBox, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrateg...
The Internet of Things promises to transform businesses (and lives), but navigating the business and technical path to success can be difficult to understand. In his session at @ThingsExpo, Sean Lorenz, Technical Product Manager for Xively at LogMeIn, demonstrated how to approach creating broadly successful connected customer solutions using real world business transformation studies including New England BioLabs and more.
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happe...
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and asse...
DevOps is all about agility. However, you don't want to be on a high-speed bus to nowhere. The right DevOps approach controls velocity with a tight feedback loop that not only consists of operational data but also incorporates business context. With a business context in the decision making, the right business priorities are incorporated, which results in a higher value creation. In his session at DevOps Summit, Todd Rader, Solutions Architect at AppDynamics, discussed key monitoring techniques...