Las Vegas Sands $1.3 Billion Casino Sale Looks Like a Good Deal for Someone

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Las Vegas Sands Corp. (NYSE: LVS) announced Thursday morning that it had sold its Bethlehem, Pennsylvania, casino for a total enterprise value of $1.3 billion to Wind Creek Hospitality, an affiliate of the Poarch Band of Creek Indians of Alabama.

The Sands Bethlehem cost around $800 million to build and opened in 2009 on the site of the historic Bethlehem Steel Works. The complex now comprises approximately 146,000 square feet of gaming space that includes approximately 175 table games and 3,200 slot machines; a hotel tower with 282 rooms; a 150,000-square-foot retail facility; an arts and cultural center; and a 50,000-square-foot multipurpose event center.

In its annual report for 2017, Sands said the Bethlehem property had a consolidated adjusted property EBITDA of $147 million. That metric is based primarily on casino revenues of $540 million, room revenues of $15 million and mall revenues of $4 million. The casino also owns a $50 million gaming license and a $17 million table games certificate, both of which have indefinite useful lives and are not subject to amortization.

Just looking at the value of the assets and without knowing how much debt was included in the enterprise-value sale price of $1.3 billion, it appears that the Poarch Band of Creek Indians of Alabama got a pretty good deal. Las Vegas Sands may not have gotten the better of the deal, but it has sold an asset that, while a decent performer, was not central its business.

Sheldon Adelson, the Sands board chair and chief executive, said:

Sands Bethlehem has become one of the leading regional entertainment and gaming destinations in the United States and we are extremely proud of the positive contributions the property has made for Bethlehem, the Lehigh Valley and Eastern Pennsylvania.

Stephanie Bryan, tribal chair and CEO of the Poarch Band, said:

We look forward to working with our new team members and the community to cement Wind Creek Bethlehem’s position as the premier entertainment destination in the northeast.  We are proud of our ability to become valued partners with communities surrounding our Wind Creek Hospitality properties.

Las Vegas Sands shareholders also liked the deal, pushing the share price up about 3.5% to $75.58, in a 52-week range of $53.38 to $79.84. The stock’s 12-month consensus price target is $81.03.