Canada’s Gateway Casinos & Entertainment Ltd. has announced an agreement with Leisure Acquisition Corp. where Leisure will become a new unit of GTWY Holdings and create a new company valued at about $1.1 billion.
The merger will be completed in the second quarter. It will allow the new GTWY Holdings to go public and trade on the New York Stock Exchange.
Mergers in the gaming industry has become more common due to the employment of special purpose acquisition companies (SPACs) that enable raising funds without initial public offerings.
British Columbia-based Gateway has previously tried to sell its shares several times. The last time was in November 2018, where Gateway withdrew from an IPO in the U.S.
The current purchase will be secured by $30 million from gaming investor HG Vora Capital Management LLC, which will buy 3 million shares for $10 apiece. Marc J. Falcone, a director of Leisure, will become president and CEO, replacing the current CEO Tony Santo, who will retire.
Gateway operates 25 casinos in BC and Ontario with a total of 12,800 slots and 365 gaming tables.
In a statement the company said it expects to generate EBITDA of $148.6 million in the coming year and $163.9 million in 2021.
