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Ameristar to buy Resorts East Casino

Ameristar Casinos is set to acquire the Resorts East Chicago casino for $675 million, it has been revealed

The casino, which holds 1,900 slot machines, 60 table games and a near-300 room hotel, will be sold by Resorts International Holdings.

Ameristar intends to double the casino's earnings within three or four years.

"It seems like they're paying a high price, but they believe they could double EBITDA [earnings before interest, taxes, depreciation and amortization]. If they can do that, then the acquisition makes sense," Jeffries and Co analyst Larry Klatzkin told the Reuters news agency.

"We moved quickly to acquire Resorts East Chicago because it hits the bulls-eye of our acquisition criteria - it allows us to enter an extremely attractive market, diversifies our cash flow, enhances our distribution channels, and provides a platform from which we can substantially grow an already well-positioned property, while achieving an appropriate return," said Ameristar chief executive and president John Boushy.

Ameristar was founded in 1954 and currently holds eight casinos in Nevada, Colorado, Mississippi, Missouri and Iowa.


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