Mesirow Financial Acquires Three Gateway Casinos & Entertainment Properties in Greater Vancouver Valued in Excess of C$500 Million

CHICAGO, March 12, 2018Mesirow Financial announced that it successfully led the sale-leaseback for three Gateway Casinos & Entertainment Limited (“Gateway”) properties located in the Greater Vancouver Regional District. Gateway is one of the largest and most diversified gaming and entertainment companies in Canada. The acquired properties include the Grand Villa Casino Burnaby, Starlight Casino New Westminster and Cascades Casino Langley and are Gateway’s three largest gaming properties in British Columbia. In each property, Gateway operates the casinos as a Service Provider to the British Columbia Lottery System, a “Crown Corporation” 100% owned by the Province of British Columbia.

Under the agreement, Mesirow Realty Sale-Leaseback, Inc. (“MRSL”), the net-lease real estate investment arm of Mesirow Financial, becomes the landlord for the three properties for a purchase price that was in excess of CAD 500 million. Certain of Gateway’s wholly owned subsidiaries have entered into long-term leases for each of the properties and continue to operate the casinos under the leases, offering the same exceptional customer experience with no expected changes to employees or operations at these locations. 

Led by Senior Managing Directors Garry Cohen and Douglas Barker, Mesirow Financial’s Sale-Leaseback Capital group arranged for the purchase of the three Gateway flagship properties. The acquisition financing was structured in collaboration with Mesirow Financial’s Credit Tenant Lease (CTL) and Structured Debt group led by Senior Managing Directors Stephen Jacobson and Nathanial Sager, as well as Mesirow’s Institutional Sales and Trading division. MRSL was principally represented by its traditional law firm Goldberg Kohn of Chicago, as well as by its local British Columbia and Canadian counsel, Boughton Law Corporation.  Four Corners Advisors and David Solano served as the buyer’s advisors on the transaction.

“This traditional real estate transaction unlocks significant value and generates cash which the company will use to reduce debt, invest in Gateway’s growth, support new developments and job creation, and deliver value to our stakeholders,” said Tony Santo, Gateway’s Chief Executive Officer.

Mesirow Financial’s Doug Barker stated, “after having closed more than USD 1.5 billion  in sale-leaseback transactions over the last two years, we are excited to have closed on Mesirow Realty Sale-Leaseback’s first cross-border transaction monetizing these three exceptional and strategic assets. We look forward to partnering and forging new relationships with both Gateway and the Catalyst Capital Group, Gateway’s private equity sponsor.”

“This transaction once again signifies the strong collaboration between our capital markets businesses and Mesirow’s growing public-private partnership initiative. We continue to enhance our full-service platform in acquiring single-tenant properties, now internationally, complemented by our strong capabilities in debt placement,” said Dominick Mondi, President of Mesirow Financial and of its Capital Markets division.

Bennett Jones LLP and Latham & Watkins LLP served as legal counsel to Gateway. Colliers International, Capital Markets Group, also advised Gateway on the transaction. 

About Mesirow Financial
Mesirow Financial is an independent, employee-owned firm founded in 1937. As specialists in investment, risk management and advisory services, we are committed to helping our institutional, corporate and individual clients achieve their objectives. Our professionals are inspired by an entrepreneurial desire to develop tailored solutions designed to deliver measurable results. To learn more, please visit mesirowfinancial.com.

About Gateway Casinos & Entertainment
Gateway Casinos & Entertainment Limited (“Gateway”) is the largest and most diversified gaming company in Canada. Operating in British Columbia, Edmonton and Ontario, Gateway has 6,000 employees and operates 25 gaming properties with 282 tables, over 9,500 slots, 68 restaurants and bars and 272 hotel rooms. As the selected service provider in Southwestern and Northern Ontario, Gateway will undertake two new planned builds in North Bay and Kenora. Gateway is undertaking an ambitious growth strategy to dramatically improve the customer experience and attract new customers. This includes the development of proprietary casino and food and beverage brands like Match Eatery & Public House and Atlas Steak + Fish. In 2017, Gateway celebrated 25 years in the business of gaming and entertainment in Canada. To learn more, please visit gatewaycasinos.com.

About The Catalyst Capital Group Inc.
The Catalyst Capital Group Inc., a private equity investment firm with more than $6 billion in assets under management founded in 2002, is a leader in operationally focused turnaround investing. The firm's mandate is to manufacture risk adjusted returns, in keeping with its philosophy of “we buy what we can build.” Catalyst's Guiding Principles of investment excellence through operational involvement, superior analytics, attention to detail, intellectual curiosity, team and reputation are key to the firm's success. The Catalyst team collectively possesses more than 110 years of extensive experience in restructuring, credit markets and merchant and investment banking in Canada, the United States, Latin America and Europe.