Private equity firm Z Capital Partners is to acquire the remaining 59 per cent stake in Nevada-based casino operator Affinity Gaming in a deal worth $580m.
Z Capital Partners, an arm of investment fund Z Capital Group, already owns a 41 per cent stake in Affinity, and will purchase the remaining shares for $17.35 per share.
Founded in 2010 and headquartered in Las Vegas, Affinity operates 11 properties in four US states including Buffalo Bill’s Resort & Casino and Whiskey Pete’s Hotel & Casino in Nevada, Lakeside Hotel Casino in Iowa, St. Jo Frontier Casino in Missouri, and Golden Gates Casino in Colorado.
"We are pleased to enter into the agreement to purchase Affinity and transition from the largest shareholder to sole controlling shareholder," said James Zenni, president and chief executive officer of Z Capital and a member of the Affinity board of directors since 2014.
"Affinity brings a compelling offer to consumers by providing high quality entertainment at affordable prices in attractive markets, and I am confident that Z Capital is uniquely positioned to grow the business for years to come.
“We look forward to leveraging our broad expertise across the hospitality, restaurant, retail and consumer sectors to help Affinity continue to expand, while driving profitability through operating improvements and enhanced efficiencies."
The board, acting upon the recommendation of a Special Committee established to consider the deal, approved the transaction with the company's shareholders also voting in favour.
"I am pleased to announce this agreement, as it delivers significant value to Affinity's shareholders," said David Reganato, chairman of the board and the Special Committee. "Today's announcement is the result of a comprehensive process in which the Special Committee, with the assistance of its outside advisors, carefully considered strategic alternatives for our shareholders.
“In connection with this process, affiliates of Z Capital made a definitive offer to acquire Affinity."
The transaction is expected to close in the first quarter of 2017, subject to the approval by Affinity shareholders and regulators, including gaming regulators in the four states in which Affinity is licensed.