Nevada regulators on Thursday cleared the way for Golden Entertainment to sell its Nevada slot machine operations to J&J Ventures Gaming for $213.5 million and $34 million in cash. Just as the Nevada Gaming Control Commission did earlier this month, the Nevada Gaming Commission unanimously agreed to sign off on the deal.
The deal is expected to close in mid-January after being postponed from the end of December. Officials said the parties need more time to complete regulatory filings and take into account financial considerations.
J&J previously acquired Golden Entertainment’s Montana slot machine operations for $109 million, plus $5 million in purchased cash.
Golden will enter into a five-year agreement with J&J Gaming, under which J&J will support gaming operations at Golden-branded bar locations in Nevada.
J&J Gaming is a privately held company and a leading operator of distributed games in Illinois and other states. Los Angeles-based private equity firm Oaktree Capital Management is its majority owner. Oaktree recently closed on the purchase of the Casablanca Resort and Virgin River Hotel and Casino in Mesquite.
Oaktree invested in J&J in 2019 and has since made 13 more acquisitions and increased its revenue 3½ times. This acquisition will be five times greater. Their capital investment began at $155 million and will reach approximately $300 million in equity. With this acquisition, Johnson & Johnson says it will be the market leader in the U.S. and has approximately 25,000 VGTs in 3,500 locations in five states.
Johnson & Johnson has announced plans to integrate the Nevada structure into its larger operations and submit an application to state regulators for this in the future.
The deal came about because Matthew Wilson, Oaktree’s managing director, went to college with Golden Entertainment president and CFO Charles Brotelle, according to David Quick, Oaktree’s managing director.
“Distribution gaming is not a huge industry, and there have been conversations for many years, and we had a lot of respect for (Golden executives) for what they did,” Quick said. “It made sense to have this business from Golden within Nevada and Montana.”
Yahoo Finance reported this week that Protell sold 35,946 shares of Golden Entertainment stock on Wednesday at an average price of $40.85 and a turnover of $1.46 million.
“I applaud the deal,” Commissioner Brian Krolicki said and thanked Golden Entertainment’s contribution to Nevada.
Golden plans to focus on its bar business and casino operations in Nevada.