Lakes Entertainment Inc. of Minnetonka said Monday it will merge with privately owned Golden Gaming Inc. of Las Vegas into a new publicly traded entity called Golden Entertainment Inc.

It's the latest makeover for a company that started and later sold several Minnesota casinos, including Grand Casino in Hinckley. The merger will leave Lakes' shareholders with a controlling 64 percent stake in the merged company.

Under terms of the agreement, Lakes shares will be valued at $9.57, about 40 percent higher than at their close on Friday, and a market cap of $128 million.

"We are excited to announce this transaction and are thrilled to partner with Golden Gaming, which has done an outstanding job of building a premier diversified gaming company in the state of Nevada," said Lyle Berman, chairman and CEO of Lakes.

Lakes has been actively searching to reinvent itself in the past 18 months after selling the last of its American Indian gaming operations, Berman said. "We only own one casino in Maryland," he said. "We were looking for one big deal. Our stockholders are gaming investors."

Berman will continue as a board member and will sign a three-year consulting agreement with the combined company. Lakes has operated casinos and racetracks in Maryland, Ohio, Kentucky and California.

Blake Sartini, the current CEO of Golden Gaming, will be chairman and chief executive of the combined company. "We believe that this transaction establishes a truly diversified gaming company, uniquely positioned to capitalize on a wide spectrum of opportunities," he said in a statement.

The merged company will operate more than 9,000 slot machines and video lottery terminals in Nevada and Maryland — at 48 taverns and 600 so-called route locations. Lakes and Golden Gaming estimate 2015 revenue at about $348.1 million. Berman hopes to see gaming expansion outside of Nevada after the merger, especially in route operations, where the company buys and places slot machines in a bar and manages them, subject to local referendums.

The proposed merger is expected to close by the end of the year.