Gateway Casinos agrees to $1.1bn merger with Leisure Acquisition

Gateway Casinos & Entertainment Limited, known to be one of Canada’s largest operators of land-based casinos, has agreed to merge with special purpose acquisition company Leisure Acquisition Group in a deal valued at $1.115 billion (approx. $0.993 billion).

Gateway, which owns 25 properties in British Columbia and Ontario, including the Starlight Casino near Vancouver, announced on Friday that Leisure Acquisition Corp., a special purpose company created to make acquisitions, will merge into a new unit of GTWY Holdings, Gateway’s parent. GTWY shares are expected to be listed on the New York Stock Exchange, according to a statement.

The Canadian casino operator has also confirmed that on completion of the transaction, Marc J Falcone, currently a Director of Leisure, will become President and Chief Executive Officer of Gateway. Tony Santo, Gateway’s current CEO, will retire from the company but continue as an advisor to the Board of Directors and Falcone for three months.

“With its strong corporate and property operating teams, diversified growth initiatives, and industry-leading operating model, Gateway has built tremendous momentum and established a solid foundation for ongoing growth,” stated Gabriel de Alba, executive chairman of Gateway.

“As we seek to execute against our many growth initiatives and deliver additional shareholder value, we are excited to partner with Leisure and appreciative of the confidence in our future as demonstrated by HG Vora’s investment commitment. We welcome Marc to Gateway and look forward to his leadership as our incoming CEO,” added de Alba.

The merger has already been approved unanimously by the Boards of Directors of both Gateway’s holding company and Leisure. It is expected to close sometime in the second quarter of 2020.

It’s also the latest in a string of mergers in the fast-growing gaming industry aided by special purpose acquisition companies, that let private companies raise money without an initial public offering. Last month, sports-betting firm DraftKings Inc. agreed to be bought by a publicly traded acquisition fund that valued the new firm at about US$3.3 billion.

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