Full House Resorts has announced that it has agreed to sell the Holiday Inn Express hotel in Fallon Nevada for $7.2 million in gross proceeds. The company expects to net approximately $6.1 million in after tax proceeds which it intends to use to reduce debt. After considerable deliberation, management determined that the hotel was not strategically important for the Company’s long-term goals or in driving business to the casino. The Company acquired Stockman’s Casino and the Holiday Inn Express in January 2007 for approximately $27.4 million based on a multiple of operating cash flow. The hotel sales price exceeds the operating cash flow multiple paid for the combined entity.
Andre M. Hilliou, Chief Executive Officer of Full House Resorts, said: “We gave careful consideration to the sale of the Holiday Inn Express hotel but in the end we believe the sale proceeds from the hotel will provide us with greater flexibility to pursue our growth goals. We expect the casino to continue to improve modestly as we upgrade the restaurants and overall operations.”
The agreement includes a joint marketing agreement with the new owner, a prohibition on gaming activity at the hotel and is subject to a 45 day due diligence period. The sale of the Holiday Inn Express is expected to close in January, 2008.