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Silver Slipper in Full House

Zacks Equity Research

Full House Resorts Inc. (FLL) recently signed a definitive acquisition agreement with Silver Slipper Casino Venture LLC. Per the agreement, Full House will acquire Silver Slipper Casino for $70 million. The purchase consideration is exclusive of estimated cash, net working capital balances, fees and expenses and other adjustments. The agreement, pending funds and regulatory approvals, is likely to be wrapped up in the third quarter of 2012.

Full House will fund the deal with a new credit facility and cash on hand.  It anticipates firm financing commitments for the total required amount by the end of April. Macquarie Capital is acting as the financial advisor to Full House in conjunction with the deal.

Located in Hancock County, Mississippi and operational since November 2006, Silver Slipper Casino has 37,000 square feet of gaming space and about 1,000 slot and video poker machines, 26 table games and a poker room. It also boasts of the only live Keno game on the Gulf Coast. The extent and choices available at Silver Slipper is expected to drive growth at Full House.

The property also comprises other amenities like fine dining and quick service restaurants and bars. A huge population from the New Orleans metropolitan area and other communities in southern Louisiana and southwestern Mississippi generally visit the property. Hence, Silver Slipper Casino’s compelling geographic location made it a lucrative acquisition target.

Full House remains committed to grow in 2012 either by acquiring properties or through signing management contracts. The company has a strong balance sheet, which it plans to leverage in opportunities in the market.

Full House Resorts, which competes with the likes of Century Casinos Inc. (CNTY), currently retains a Zacks #4 Rank that translates into a short-term Sell rating. We are maintaining our long-term Neutral recommendation on the stock.

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