Accretive Acquisition Further Expands Penn National’s Regional Gaming
Platform with Addition of Newest Resort in Bossier City/Shreveport Market
WYOMISSING, Pa.--(BUSINESS WIRE)--Jan. 2, 2019--
Penn National Gaming, Inc. (PENN:Nasdaq) (“Penn National” or the
“Company”) announced today that it completed the purchase of the
operations of Margaritaville Resort Casino in Bossier City, Louisiana
(“Margaritaville”), for total consideration of $115 million. The
transaction was financed with incremental borrowings under the Company’s
revolving credit facility with the purchase price representing a
multiple of approximately 5.0x expected trailing twelve months adjusted
earnings before interest, taxes, depreciation, amortization, and
management fee for the period ended December 31, 2018. Penn National
expects the purchase multiple will be reduced to below 4.5x based on
expected operating synergies and cost savings.
Simultaneous with the closing of the transaction, Penn National entered
into a triple net lease agreement with VICI Properties Inc. (NYSE:VICI)
(“VICI”) for the Margaritaville facility. The lease has 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 greater than 2.0x, and the
Tenant’s obligations under the lease are guaranteed by Penn National.
Timothy J. Wilmott, Penn National’s Chief Executive Officer, stated,
“Margaritaville, Bossier City’s newest casino resort, is an attractive
addition to our regional gaming platform. This acquisition is in line
with our efforts to enhance shareholder value as it is immediately
accretive to our free cash flow, further diversifies our revenue and
operating base and offers a well-defined path to the realization of
synergies that are expected to lower the purchase multiple.
Margaritaville is one of the leading casino resorts in Bossier City, and
we expect that our proven integration and operating strategies will help
grow operating margins as well as free cash flow contributions from the
property. We are excited to welcome Margaritaville employees to Penn
National.”
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.
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. Reflecting the recent completion of the
Pinnacle Entertainment transaction the Company now operates 41
facilities in 18 jurisdictions. In total, Penn National facilities
feature over 50,200 gaming machines, 1,250 table games and approximately
9,400 hotel rooms. The Company also offers social online gaming through
its Penn Interactive Ventures division and has leading customer loyalty
programs with over five million active customers.
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. 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; potential adverse reactions or changes to
business or employee relationships, including those resulting from the
completion of 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; 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/20190102005497/en/
Source: Penn National Gaming, Inc.
William J. Fair
Chief Financial Officer
610/373-2400
Joseph N. Jaffoni, Richard Land
JCIR
212/835-8500 or penn@jcir.com
