Monarch Casino Expected to Pursue M&A, Could Double in Size, Says Gaming Expert
Monarch Casino & Resort (NASDAQ:MCRI) could evaluate mergers and acquisitions opportunities, and the society could image its portfolio of gaming assets inwards triad years, according to an industry expert. That’s as it ramps upwardly what’s been a profitable enlargement at its Joseph Black Hawk, Colo. integrated resort,
Howard Jay Klein, author of the investiture newssheet The House Edge, says Reno-based Monarch “has reached the pointedness of beingness a dealings stock.”
Its price at present has go valued currency that could be division of an acquisition. Its fantabulous equilibrate sheet assures no problem funding a deal for an operator of equalise size, or fifty-fifty larger,” said Calvin Richard Klein in a recent report.
Shares of Monarch, which owns the Atlantis inward Reno and its namesake locale inward Colorado, are upwardly to a greater extent than 46 percent over the past tense 12 months and 11.27 percent year-to-date. Currently, Monarch is the smallest publically traded gaming companion inwards the US by keep down of properties. That could change either by additions to its portfolio or single-casino operators coming to market.
Potential Candidates for Monarch
On the backrest of a hexad percent make headway over the past tense month, Monarch has a marketplace capitalization of $1.26 one million million as of Oct. 15.
While Wall Street hasn’t mentioned specific companies Monarch could target inward a takeover, the list of public operators with marketplace values below that of the Atlantis proprietor is small. They consist of just Century Casinos (NASDAQ:CNTY) and Full House Resorts (NASDAQ:FLL), spell Strat possessor Golden Entertainment (NASDAQ:GDEN) is more or less larger than Monarch.
With peer-low meshing leverage, Monarch could take part inwards manufacture integration into year-end, or at some pointedness next year. The fellowship hasn’t added another attribute since purchasing the Colorado locus inward 2012. As Calvin Klein notes, the manipulator trimmed its debt adulterate by $25 gazillion to $146 million, indicating its counterbalance bed sheet is sturdy — an asset, should it adjudicate to lead shopping.
“The realistic pocket billiards of potentiality acquisition candidates is shrinkage fast, so we believe MCRI will be moved to human action patch valuations are relieve within its financial reach,” he said.
Full House a Possibility?
Noting it’s a “theoretical deal,” Calvin Richard Klein posits Full House as a potency butt for Monarch. The former is looking for to grow its step inward Indiana, procure a certify inward Illinois, and also owns casinos in Colorado, Mississippi, and Nevada.
Klein says the combined companionship — if a marriage ceremony were to be consummated — could nick revenue of $655 zillion by 2023 and earnings per portion of $4.35 to $4.85.
At first off glance, Full House would live easily affordable for Monarch, as the latter’s market place economic value is more than three-bagger that of the former. Such a transaction would accomplish the objective of expanding Monarch’s portfolio of casinos.
But it remains to live seen if that fellowship is interested in markets such as IN and Mississippi, and, as Calvin Richard Klein notes, if the Farahi kinsfolk is willing to get its wager diluted. The Farahis are the largest owners of Monarch equity.