Acquisition of the Newest Resort in the
Bossier City/Shreveport Market Expected to be Immediately Accretive
to Operating Results
Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn National” or
the “Company”), announced today that it has entered into a
definitive agreement to acquire the operations of
Margaritaville Resort Casino in Bossier City, Louisiana
(“Margaritaville”) for approximately $115 million cash in a
transaction that is expected to be immediately accretive to
operating results upon closing.
Timothy J. Wilmott, Penn National’s Chief Executive Officer,
stated, “We are pleased to partner with VICI Properties Inc. to
structure this tuck-in acquisition of Bossier City’s newest casino
resort, which is consistent with our criteria for transactions that
are accretive to free cash flow, strategically diversify our
revenue and operating base, and present well-defined paths to the
realization of significant synergies. With a purchase multiple of
5.5x trailing twelve months adjusted earnings before interest,
taxes, depreciation, amortization, and management fees which we
believe declines to below 5.0x with synergies, Penn National
believes this transaction further supports our efforts to enhance
shareholder value.”
Simultaneous with the closing of the transaction, Penn National
will enter into a triple net lease agreement with VICI Properties
Inc. (NYSE: VICI) (“VICI”) for the Margaritaville facility. The
lease will have an initial annual rent of approximately $23 million
and an initial term of 15 years, with four 5-year renewal options.
The rent coverage ratio in the first year after closing is expected
to be 1.9x and the Tenant’s obligations under the lease will be
guaranteed by Penn National.
The proposed transaction will further expand Penn National’s
regional gaming platform with a property that is complementary to
its pro-forma operating base following the completion of the
Company’s pending acquisition of Pinnacle Entertainment, Inc.
(NASDAQ: PNK) (“Pinnacle”). Upon closing the Margaritaville
transaction and the pending Pinnacle transaction (and taking into
account announced divestitures), Penn National’s portfolio of
regional gaming facilities will increase to 40 properties in 18
jurisdictions.
Penn National does not anticipate that this transaction will
alter the Company’s expectation that it will end the year with net
rent-adjusted leverage in the mid-5x range, pro forma for the
completion of the Pinnacle acquisition.
Built in 2013, Margaritaville Resort Casino is the premier venue
for gaming, lodging, dining and entertainment experiences in
Northern Louisiana. The property features 26,500 square feet of
casino space, 395 hotel rooms, an island-style escape theme, 6
restaurants and food and beverage outlets, a 15,000 square foot
1,000-seat theater and 9,500 square feet of meeting space.
Margaritaville Resort Casino generated adjusted EBITDAM of
approximately $44 million for the twelve month period ended March
31, 2018.
The transaction, expected to close in the second half
of 2018, is subject to the approval of the Louisiana Gaming Control
Board and other customary closing conditions.
About Penn National Gaming
Penn National Gaming owns, operates or has ownership interests
in gaming and racing facilities and video gaming terminal
operations with a focus on slot machine entertainment. At March 31,
2018, the Company operated twenty-nine facilities in seventeen
jurisdictions, including California, Florida, Illinois, Indiana,
Kansas, Maine, Massachusetts, Mississippi, Missouri, Nevada, New
Jersey, New Mexico, Ohio, Pennsylvania, Texas, West Virginia, and
Ontario, Canada. At March 31, 2018, in aggregate, Penn National
Gaming operated approximately 36,100 gaming machines, 810 table
games and 4,800 hotel rooms. The Company also offers social online
gaming through its Penn Interactive Ventures division.
Important Additional Information
In connection with the proposed Pinnacle transaction, on
February 8, 2018, Penn filed with the Securities and Exchange
Commission (the “SEC”) a registration statement on Form S-4 that
contains a joint proxy statement of Penn and Pinnacle and also
constitutes a prospectus of Penn (the “joint proxy
statement/prospectus”). The registration statement was declared
effective by the SEC on February 28, 2018 and Penn and Pinnacle
commenced mailing the definitive joint proxy statement/prospectus
to their respective shareholders and stockholders on February 28,
2018. This communication does not constitute an offer to sell or
the solicitation of an offer to buy any securities or a
solicitation of any vote or approval. Shareholders of Penn and
stockholders of Pinnacle are urged to read the definitive joint
proxy statement/prospectus regarding the proposed transaction and
any other relevant documents filed or that will be filed with the
SEC, as well as any amendments or supplements to those documents,
because they contain or will contain important information.
Investors may obtain a free copy of the registration statement and
the joint proxy statement/prospectus, as well as other filings
containing information about Penn and Pinnacle, without charge, at
the SEC’s website at www.sec.gov. Copies of the documents filed
with the SEC by Penn can be obtained, without charge, by directing
a request to Justin Sebastiano, Penn National Gaming, Inc., 825
Berkshire Boulevard, Suite 200, Wyomissing, Pennsylvania 19610,
Tel. No. (610) 401-2029. Copies of the documents filed with the SEC
by Pinnacle can be obtained, without charge, by directing a request
to Vincent Zahn, Pinnacle Entertainment, Inc., 3980 Howard Hughes
Parkway, Las Vegas, Nevada 89169, Tel. No. (702) 541-7777.
Forward-looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding the expected impact of the
acquisition of Margaritaville on the Company’s operations and
statements regarding the anticipated timing of closing of the
acquisition. These statements can be identified by the use of
forward looking terminology such as “expects,” “believes,”
“estimates,” “projects,” “intends,” “plans,” “seeks,” “may,”
“will,” “should” or “anticipates” or the negative or other
variations of these or similar words, or by discussions of future
events, strategies or risks and uncertainties. Although the Company
believes that its expectations are based on reasonable assumptions
within the bounds of its knowledge of its business, there can be no
assurance that actual results will not differ materially from our
expectations. Meaningful factors that could cause actual results to
differ from expectations include, but are not limited to, risks
related to the acquisition of the Margaritaville operations by the
Company and the integration of the business to be acquired; the
possibility that the proposed transaction does not close when
expected or at all because required regulatory or other approvals
are not received or other conditions to the closing are not
satisfied on a timely basis or at all; potential adverse reactions
or changes to business or employee relationships, including those
resulting from the announcement or completion of the transaction;
potential litigation challenging the transaction; the possibility
that the anticipated benefits of the transaction are not realized
when expected or at all, including as a result of the impact of, or
issues arising from, the integration of the companies; our ability
to realize potential synergies or projected financial results; the
various risks relating to the Company’s pending acquisition of
Pinnacle Entertainment, Inc., and other factors as discussed in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2017, subsequent Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, each as filed with the United States
Securities and Exchange Commission. The Company does not intend to
update publicly any forward-looking statements except as required
by law. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this press release may not
occur.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180619005466/en/
Penn National Gaming, Inc.William J. Fair, 610-373-2400Chief
Financial OfficerorJCIRJoseph N. Jaffoni, Richard
Land212-835-8500penn@jcir.com
PENN Entertainment (NASDAQ:PENN)
Historical Stock Chart
From Mar 2024 to Apr 2024
PENN Entertainment (NASDAQ:PENN)
Historical Stock Chart
From Apr 2023 to Apr 2024