v3.25.2
BUSINESS COMBINATIONS
6 Months Ended
Jun. 30, 2025
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
BUSINESS COMBINATIONS BUSINESS COMBINATIONS
Merger with Queen Casino & Entertainment, Inc.

The Merger between the Company and Queen was accounted for as a transaction between entities under common control in accordance with ASC Topic 805, Business Combinations (“ASC 805”), in which the accounting acquirer (Parent and its affiliates) obtained control of the Company. As described in Note 2, “Summary of Significant Accounting Policies”, the Company has elected to push down its Parent’s basis in its net assets into its financial statements, and as a result, the net assets of the Predecessor were measured and recognized at their fair values as of the acquisition date and were combined with those of Queen at Queen’s historical carrying amounts and are presented on a combined basis. The following disclosures relate to the Company’s election to apply push down and show the effect of the change in control.

The fair value of the Merger consideration was $955.6 million, which represents 52,364,192 total shares outstanding prior to the Merger multiplied by the Merger value of $18.25 per share. Immediately following the transaction, the Company repurchased 22,804,384 shares at a price of $18.25 for total a total repurchase price of $416.2 million.
The preliminary allocation of the purchase price is as follows:
As of February 7, 2025
(in thousands)Preliminary as of February 7, 2025Year to Date AdjustmentsPreliminary as of June 30, 2025
Cash and cash equivalents$173,550 $— $173,550 
Restricted cash57,352 — 57,352 
Other current assets210,447 — 210,447 
Property and equipment1,065,486 (4,745)1,060,741 
Right of use assets1,692,346 17,215 1,709,561 
Goodwill1,555,354 9,131 1,564,485 
Intangible assets1,866,963 (7,542)1,859,421 
Other assets131,457 — 131,457 
Total current liabilities(548,702)— (548,702)
Lease liabilities(1,823,153)(17,215)(1,840,368)
Long-term debt(2,914,688)— (2,914,688)
Other long-term liabilities(510,765)3,156 (507,609)
Net assets acquired$955,647 $— $955,647 

The purchase consideration has been allocated to the tangible and identifiable intangible assets and liabilities based upon their estimated fair values as of the acquisition date, with the excess of the purchase consideration over the aggregate net fair values recorded as goodwill, which is not deductible for tax purposes. Accounts receivable, other assets, current liabilities and inventories were stated at their historical carrying value, which approximates fair value given the short-term nature of these assets and liabilities. The estimate of fair value for property and equipment and owned real property was based on an assessment of the assets' condition as well as an evaluation of the current market value of such assets. The fair value of leasehold interests were estimated based on evaluating contractual rent payments relative to market rent giving consideration to the Company’s capitalization rates and rent coverage ratios, under the income method or by estimating the fee simple value and estimated rate of return, depending on the nature of the underlying leasehold interest. In connection with with remeasuring the Company’s lease liabilities, unfavorable off-market components of $130.8 million were recognized as a decrease to the Company’s right of use assets, and will be amortized as a reduction of lease expense on a straight line basis over the remaining lease term.
The Company recorded intangible assets based on estimates of fair value which consisted of the following:
Valuation ApproachEstimated Useful Life
(in years)
Estimated Fair Value
Gaming licensesGreenfield Method16$759,041 
Customer relationshipsMulti-period Excess earnings method4349,980 
Developed technologyRelief from royalty method5253,200 
Trade namesRelief from royalty method1274,700 
Intellectual property licenseRelief from royalty method7141,000 
Indefinite lived trade namesRelief from royalty methodIndefinite281,500 
Total fair value of intangible assets$1,859,421 

The valuation of intangible assets was determined using income approach methodologies including the greenfield method, multi-period excess earnings method and the relief from royalty method. Level 3 inputs used in estimating future cash flows included terminal growth rates of 3%, royalty rates between 2% and 19%, discount rates between 11% and 15%, operating cash flows, estimated construction costs, and pre-opening expenses, among others. The projected future cash flows are discounted to present value using an appropriate discount rate.
The estimated fair values were based on assumptions that the Company believes are reasonable. As of June 30, 2025 (Successor), the Company is in the process of completing its valuation of tangible and intangible assets and the allocation of the purchase price to the assets acquired and liabilities assumed, including the allocation of goodwill to reporting units, which will be completed once the valuation process has been finalized.

The Company incurred $4.5 million and $1.2 million of transaction related expenses for the three months ended June 30, 2025 (Successor) and June 30, 2024 (Predecessor), respectively. The Company incurred $20.4 million, $11.2 million and $2.0 million of transaction-related expenses for the period from February 8, 2025 to June 30, 2025 (Successor), the period from January 1, 2025 to February 7, 2025 (Predecessor), and the six months ended June 30, 2024 (Predecessor), respectively. Transaction-related expenses were incurred in connection with the Merger and are primarily related to legal and professional fees, which have been included in General and administrative in the condensed consolidated statements of operations.