Dreams and Enjoy will merge with the split 64:36
After signing a non-binding agreement in October 2021, the two largest casino companies in Chile, with stakes across Latin America, have agreed terms for a merger, pending regulatory approvals and certain shareholder approvals.
Enjoy SA (CCC) and dreams SA will merge with the Enjoy Name Survival and its shareholders controlling 36% of the newly formed company. Dreams shareholders (Claudio and Humberto Fischer) lose brand name but enjoy the largest stock share at around 64%.
Fitch Ratings confirmed most of its October analysis on Tuesday that the merger has potential benefits for the Enjoy credit profile. However, a requirement that exiting Enjoy shareholders cannot exceed 9% of total shares could push back the full completion of the deal to the last quarter of 2022, as opposed to “well into 2022”, as this was determined at the end of last year.
Results, scope and scale strengthened
The analyst’s notes historically mention higher margins maintained by Dreams contributing to a better bottom line for the newly merged company as well as adding breadth and depth to Enjoy’s current capital structure, geographic diversity and greater global scale.
Supply chain and other redundancies will be eliminated while the new company’s footprint will nearly cover 60% of all casinos in Chile and represent more than 75% of all revenue of the local gaming industry. Visitation to the new company’s casinos will also occur in Argentina, Colombia, Panama, Peru and Uruguay.
dreams covers more areas geographically with a total of 18 active licenses, which makes it the largest casino operator in Latin America with eight casinos opened in Lima, Peru, seven in Chile, three in Colombia and one in Panama and Argentina. Enjoy dominates the Chilean industry with eight casinos there and just one location in Uruguay. About ⅓ of all casino licenses in Chile belong to Enjoy.
A diversified portfolio
Not all of the above properties are standalone casinos, holdings include hotels and event centers as well as restaurants and tourist destinations throughout the region.
Dreams President Claudio Fischer said:The new company will combine all the experience of both groups and a financial solidity that will allow it to face with force the new challenges that the effects of the pandemic and the development of new technologies have imposed on the gaming and entertainment industry in Latin America..”
Enjoy President Henry Comber added: “…the merger of Dreams and Enjoy will consolidate the leadership of a Chilean company in the casino industry in Latin America.”
Source: Enjoy & Dreams merger deal potentially positive for Enjoy’s ratings, FitchRatings, January 18, 2022