Seminole Tribe Buys Hard Rock International
The Tribe is purchasing Hard Rock International and other related entities from The Rank Group Plc for approximately $965 million.
The company is no stranger to the Hard Rock brand and already owns two casino resorts in south Florida -- in Hollywood and Tampa -- which opened in 2004. The deal, which is expected to close in March 2007, will give the Seminoles ownership of as 68 company-owned Hard Rock Cafe Restaurants and retail stores, including 44 in the United States, three in Canada, 17 throughout Europe, three in Australia and one in Puerto Rico.
Additionally, the Tribe will control licensing or franchise agreements for another 56 restaurants and five hotels with locations in places such as Orlando and Chicago, plus Hard Rock Live performance venues. Hard Rock Cafe International is headquartered in Orlando.
A promotional video shown during a press conference earlier this afternoon said Hard Rock has 52 million customers and sales of $1.7 billion annually.
“This is legendary day for the Tribe, casino industry, restaurant industry and hotel industry. This is a monumental transaction,” said James Allen, CEO of Seminole gaming at a press conference earlier this afternoon. “We competed against the biggest investment companies in the world. We looked at all the options and realized this is the step to go out in the real world and play with the big boys.”
According to Allen, the two Seminole casino resorts are two of the most successful casinos in the world. During the press conference, Allen actually alluded that the properties – which do not have table games – surpasses every other U.S. based casino in profits. Revenue at the properties is about $1 million a day, Allen said.
The Tampa and Orlando hotels are running 96 percent occupancy on an annualized basis, Allen said, acknowledging the company probably built the hotels too small and under anticipated demand. Additionally, when the Seminoles were preparing their bid, Allen said the two properties accounted for more than 25 percent of Hard Rock profits worldwide.
The purchase is believed to be the first of a major international corporation by a Native American Indian Tribe and marks a milestone in the growing economic power and prominence of the Seminole Tribe of Florida and the effect Indian gaming has had on the U.S. economy. Indian Gaming is about a $22 billion a year business in the U.S. To put that into perspective, the Las Vegas Strip brings in about $5.8 billion in revenue a year.
“The Seminole Indians found gaming and since then we have been able to educate our people. We believe this is an opportunity for us to provide further opportunities for our people,” said Andrew Bowers, Jr, a tribal council representative. “The Seminoles have not looked back. We have started a journey and we are going to keep going and this is another big step in that journey.”
The Tribe opened up its first bingo hall in 1979 and is widely credited with kick-starting the Indian Gaming movement.
In addition to its two Seminole Hard Rock Hotels & Casinos, the Seminole Tribe owns and operates five more non-Hard Rock Florida casinos in Coconut Creek and Hollywood on the Southeast coast, in Immokalee near Naples, on the Brighton Reservation north of Lake Okeechobee and on the Big Cypress Reservation south of Lake Okeechobee. The Seminole Tribe has long been recognized for innovation in its gaming and other businesses.
According to a press release issued in conjunction with the announcement Piper Jaffray is serving as the Tribe’s financial advisors and Greenberg Traurig LLP and Eric Dorsky, P.A. are serving as the Tribe’s legal advisors. Merrill Lynch conducted the sale on behalf of The Rank Group Plc, which acquired the Hard Rock brand in 1990 as part of Mecca Leisure and continued expansion of the concept in its original geographic territory, later acquiring Hard Rock America from Peter Morton in 1996 to consolidate the worldwide brand.
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