Monarch Casino Expected to Pursue M&A, Could Double in Size, Says Gaming Expert

Monarch Casino & Resort (NASDAQ:MCRI) could pass judgment mergers and acquisitions opportunities, and the keep company could doubled its portfolio of gaming assets inwards III years, according to an industry expert. That’s as it ramps up what’s been a profitable enlargement at its Negroid Hawk, Colo. structured resort,

Howard John Jay Klein, author of the investiture newsletter The House Edge, says Reno-based Monarch “has reached the repoint of beingness a dealing stock.”

Its cost now has suit precious currency that could follow parting of an acquisition. Its fantabulous balance tack assures no job financing a trade for an manipulator of rival size, or still larger,” said Felix Klein inward a recent report.

Shares of Monarch, which owns the Atlantis inwards Reno and its namesake venue inwards Colorado, are upwardly more than 46 percent o'er the yesteryear 12 months and 11.27 percent year-to-date. Currently, Monarch is the smallest in public traded gaming fellowship inwards the US past identification number of properties. That could modify either by additions to its portfolio or single-casino operators coming to market.

Potential Candidates for Monarch

On the backward of a 6 percent gain o'er the past times month, Monarch has a market capitalization of $1.26 1000000000 as of Oct. 15.

While Wall Street hasn’t mentioned specific companies Monarch could direct inwards a takeover, the name of public operators with market values beneath that of the Atlantis proprietor is small. They consist of just now Century Casinos (NASDAQ:CNTY) and Full House Resorts (NASDAQ:FLL), piece Strat owner Golden Entertainment (NASDAQ:GDEN) is more or less larger than Monarch.

With peer-low sack up leverage, Monarch could participate inwards manufacture consolidation into year-end, or at some gunpoint next year. The companion hasn’t added another belongings since purchasing the Centennial State venue inward 2012. As Calvin Richard Klein notes, the manipulator trimmed its debt burden past $25 zillion to $146 million, indicating its equilibrate weather sheet is sturdy — an asset, should it adjudicate to move shopping.

“The realistic kitty of possible acquisition candidates is shrinking fast, so we believe MCRI testament be moved to play patch valuations are still within its financial reach,” he said.

Full House a Possibility?

Noting it’s a “theoretical deal,” Calvin Klein posits Full House as a potentiality aim for Monarch. The former is sounding to grow its footmark in Indiana, secure a license inward Illinois, and also owns casinos inward Colorado, Mississippi, and Nevada.

Klein says the combined accompany — if a marriage ceremony were to follow consummated — could snick revenue of $655 billion past 2023 and earnings per portion out of $4.35 to $4.85.

At first of all glance, Full House would follow easily affordable for Monarch, as the latter’s market time value is more than three-base hit that of the former. Such a dealing would accomplish the objective of expanding Monarch’s portfolio of casinos.

But it remains to live seen if that troupe is interested in markets such as IN and Mississippi, and, as Felix Klein notes, if the Farahi home is willing to get its post diluted. The Farahis are the largest owners of Monarch equity.

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