ACQUISITIONS

Apr. 24, 2020

Black Hawk Casinos

On January 23, 2020, the Company acquired a subsidiary of Affinity Gaming (“Affinity”) that owns three casino properties located in Black Hawk, Colorado: Golden Gates, Golden Gulch and Mardi Gras (the “Black Hawk Casinos”).

The total consideration paid by the Company in connection with the Black Hawk Casinos acquisition was approximately $53.8 million, or $50.5 million net of cash acquired, excluding transaction costs. The Company incurred transaction costs related to this acquisition of $0.2 million in each of the three months ended June 30, 2020 and 2019, respectively, and $0.8 million and $0.7 million during the six months ended June 30, 2020 and 2019, respectively. These costs are included in acquisition, integration and restructuring expenses in the condensed consolidated statements of operations and comprehensive income.

The Company accounted for the acquisition of the Black Hawk Casinos as a business combination using the acquisition method with Twin River as the accounting acquirer in accordance with FASB Codification Topic 805, Business Combinations (“ASC 805”). Under this method of accounting, the purchase price has been allocated to Black Hawk Casinos’ assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date.

The identifiable intangible assets recorded in connection with the closing of the Black Hawk acquisition based on preliminary valuations include trademarks of $2.1 million and rated player relationships of $0.6 million, which are being amortized on a straight-line basis over estimated useful lives of approximately 10 years and 6 years, respectively. The Company also initially recorded an intangible asset related to gaming licenses of $3.3 million, with an indefinite life. However, in connection with the impairment testing discussed in Note 5. “Goodwill and Intangible Assets”, the asset was deemed fully impaired and its value was written down to zero as of March 31, 2020. The preliminary fair value of the identifiable intangible assets acquired was determined by using an income approach. Significant assumptions utilized in the income approach were based on company-specific information and projections, which are not observable in the market and are thus considered Level 3 measurements as defined by authoritative guidance.

As of June 30, 2020, the purchase price allocation was preliminary and will be finalized when the final assessments of the fair value of all acquired assets and assumed liabilities are completed. There can be no assurance that such finalization will not result in material changes from the preliminary purchase price allocations. The Company’s estimates and assumptions are subject to change during the measurement period (up to one year from the acquisition date).

Revenue included in operations from the Black Hawk Casinos, from the date of their acquisition, January 23, 2020, for the three and six months ended June 30, 2020 was $1.1 million and $5.5 million, respectively.

Casino KC and Casino Vicksburg

On July 1, 2020, the Company completed its acquisition of the operations and,real estate of Casino KC and Casino Vicksburg from affiliates of Eldorado.

The total consideration paid by the Company in connection with the acquisition was approximately $230 million, subject to certain customary post-closing adjustments and excluding transaction costs. The Company recorded transaction costs related to the acquisition of Casino KC and Casino Vicksburg of $0.4 million and $0.9 million during the three and six months ended June 30, 2020, respectively. These costs are included in acquisition, integration and restructuring expense in the condensed consolidated statements of operations and comprehensive income.

The Company expects to account for the acquisition of Casino KC and Casino Vicksburg as a business combination using the acquisition method with Twin River as the accounting acquirer in accordance with ASC 805. Under this method of accounting, the purchase price has been allocated to Casino KC’s and Casino Vicksburg’s assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date.

The following table summarizes the consideration paid and the preliminary fair values of the assets acquired and liabilities assumed in connection with the acquisition. Due to the fact that the transaction only recently closed, the purchase price allocation is preliminary and will be finalized when valuations are complete and final assessments of the fair value of other acquired assets and assumed liabilities are completed. There can be no assurance that such finalizations will not result in material changes from the preliminary purchase price allocations. The Company’s estimates and assumptions are subject to change during the measurement period (up to one year from the acquisition date), as the Company finalizes the valuations of certain tangible and intangible asset acquired and liabilities assumed.


	Preliminary as of July 1, 2020
Cash	$	4,362
Accounts receivable	594
Inventory	164
Prepaid expenses and other assets	709
Property and equipment	60,574
Right of use asset	41,971
Intangible assets	139,760

Other assets	118
Goodwill	52,285
Accounts payable	(614)

Accrued and other current liabilities	(4,003)
Lease obligations	(65,381)
Deferred income tax liabilities	(233)
Other long-term liabilities	(306)
Total purchase price	$	230,000

Eldorado Shreveport and MontBleu

On April 24, 2020, the Company announced that it had entered into an agreement with Eldorado and certain of its affiliates to acquire Eldorado Shreveport Resort and Casino in Shreveport, Louisiana (“Shreveport”) and the MontBleu Resort Casino & Spa in Lake Tahoe, Nevada (“MontBleu”) for an aggregate purchase price of $155 million in cash ($140 million payable at closing and $15 million payable one year thereafter), subject to customary post-closing adjustments. The transaction is expected to close in the first half of 2021, subject to receipt of required state regulatory approvals and other customary closing conditions.

The company recorded acquisition costs related to the pending acquisitions of Shreveport and MontBleu of $0.9 million and $1.0 million during the three and six months ended June 30, 2020, respectively. These costs are included in acquisition, integration and restructuring expenses in the condensed consolidated statements of operations and comprehensive income.

Bally’s Atlantic City

On April 24, 2020, the Company announced that it had entered into an agreement with affiliates of Caesars Entertainment Corporation and VICI Properties Inc. to acquire Bally's Atlantic City Hotel & Casino in Atlantic City, New Jersey (“Bally’s Atlantic City”) for $25 million in cash subject to customary post-closing adjustments. The transaction is expected to close in mid-to-late fourth quarter 2020, subject to receipt of required state regulatory approvals and other customary closing conditions.

The company recorded acquisition costs related to the pending acquisition of Bally’s Atlantic City of $0.9 million and $1.5 million during the three and six months ended June 30, 2020, respectively. These costs are included in acquisition, integration and restructuring expense in the condensed consolidated statements of operations and comprehensive income.