Billionaire Tilman Fertitta’s big move to the stock market just got even larger.
In February, Fertitta Entertainment, the parent company of the Golden Nugget Casinos and Landry’s, agreed to go public through a merger with FAST Acquisition Corp., a special acquisition company led by Sandy Beall, the founder of Ruby Tuesday, and Doug Jacob, who helped launch &pizza.
That deal was recently amended to include Mastro’s Restaurants, Aquarium Restaurants, Vic and Anthony’s Steakhouse, Galveston Island Historic Pleasure Pier, and a handful of smaller restaurant concepts, adding a total of 42 incremental business assets. Fertitta Entertainment is also acquiring the Catch restaurants, including Catch Steak, a concept in which billionaire Fertitta already indirectly owns 50 percent. The latest restaurants were brought on for no additional debt.
Originally, the merger valued Fertitta Entertainment at $6.6 billion, but the latest add-ons push it to $8.6 billion. Fertitta’s equity in the soon-to-be public company will also rise from roughly 60 percent to approximately 72 percent.
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When Fertitta Entertainment reaches the stock market, it will be one of the largest publicly traded hospitality brands, with five land-based casinos, substantial ownership of Golden Nugget Online Gaming, and more than 500 restaurants, amusements, hotels, entertainment venues, and other businesses across 38 states and several international markets.
“The addition of Mastro’s and the destination entertainment businesses provide tremendous cash flow and growth opportunities to the Company and we are excited that Tilman is contributing the new assets to the Company,” Jacob said in a statement. “These brands create an even stronger portfolio to leverage for potential future acquisitions.”
The SEC review process is expected to begin around the third week in July, and the transaction is now expected to close in Q4. The boards of directors of each of FAST and Fertitta Entertainment have unanimously approved the amended transaction. It will also require the approval of the stockholders of FAST and is subject to other customary closing conditions.
Fertitta Entertainment expects to earn net revenues between $917 million and $920 million and adjusted EBITDA between $270 million and $275 million for the quarter ending June 30. For the full year, the brand projects adjusted EBITDA of more than $800 million.
“The contribution of the new business assets greatly improves the Company’s operating cash flow, provides better assets for organic growth, and significantly deleverages the Company as no incremental debt is being incurred by the Company as part of the revised transaction,” Fertitta said in a statement. “Since the rollout of COVID vaccinations, the operating results of the incremental assets have been so strong, I decided that I should be focused all in on the Company as I see opportunities for a significant acquisition that would not otherwise be available to the Company without this revised transaction. We were a great company before and now even better today.”
Fertitta Entertainment is set to return to the stock market 11 years after Fertitta took the company private. In the brand’s 35-year history, it has executed more than 25 acquisitions, including six public companies valued at more than $3 billion. As a private company, it grew unit level EBITDA from $208 million in 2010 to $741 million in 2019.
Institutional shareholders have committed to a $1.2 billion PIPE investment (Private Investment in Public Equity); cash proceeds are expected to consist of FAST’s $200 million cash in trust. Fertitta Entertainment will use the proceeds from the transaction for general corporate purposes, to accelerate growth initiatives, and repay existing debt.
