Accretive Transaction Creates North America’s Largest and Most Diversified Regional Gaming Operator
The transaction further enhances Penn National’s position as North
America’s leading regional gaming operator, with 40 facilities in 18
“As the industry leader, Penn National is poised for continued growth with a portfolio of premiere gaming facilities and more than five million active customers in its player rewards database. With the expected incremental free cash flow to be generated from our expanded base of operations, we believe we are well positioned to reduce leverage, evaluate additional accretive strategic growth investments and opportunistically return capital to shareholders.
“We are pleased to welcome Pinnacle’s team members to Penn National. Our
operating teams consistently deliver best-in-market gaming,
entertainment and dining experiences for our customers. We expect to
Penn National acquired all of the outstanding shares of Pinnacle through a public company merger for consideration of
In addition, GLPI, a landlord for Penn National and Pinnacle under respective master lease agreements, agreed to amend the terms of the Pinnacle master lease to permit the divestiture of the three Pinnacle properties included in the lease. In connection with the principal transaction, other notable agreements resulted in:
The sale and leaseback of the real estate associated with Penn
Plainridge Park Casinoin Massachusettsfor $250 million, which was added to the Pinnacle master lease assumed by Penn National.
The sale of the real estate associated with Pinnacle’s
Belterra Parkto an affiliate of Boyd for approximately $57.7 millionthrough funding provided by GLPI to Boyd.
An amendment to the terms of the Pinnacle master lease to reflect (i)
additional annual fixed rent of
$25 millionin respect of the Plainridge sale leaseback described above and (ii) a $13.9 millionincrease in annual rent, which will approximate a rent coverage ratio of 1.8x prior to any anticipated synergies (after adjusting for the divestiture of the facilities acquired by Boyd and the Plainridge transaction).
- GLPI and Boyd entered into a master lease agreement for the three divested facilities that were previously part of the Pinnacle master lease, pursuant to which Boyd leases the divested real property from GLPI.
Concurrent with the closing of the transaction, Penn National entered
into an incremental joinder to its existing credit agreement that
provides for a
This communication may contain certain forward-looking statements, including certain plans, expectations, goals, projections, and statements about the benefits of the transaction, Penn’s plans, objectives, expectations and intentions, and other statements that are not historical facts. Such statements are subject to numerous assumptions, risks, and uncertainties. Statements that do not describe historical or current facts, including statements about beliefs and expectations, are forward-looking statements. Forward-looking statements may be identified by words such as “expect,” “anticipate,” “believe,” “intend,” “estimate,” “plan,” “target,” “goal,” or similar expressions, or future or conditional verbs such as “will,” “may,” “might,” “should,” “would,” “could,” or similar variations. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995.
While there is no assurance that any list of risks and uncertainties or
risk factors is complete, below are certain factors which could cause
actual results to differ materially from those contained or implied in
the forward-looking statements including: risks related to the
integration of the businesses and assets 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 two companies; risks associated
with increased leverage from the transaction; and other factors
discussed in the sections entitled “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” in Penn’s and Pinnacle’s respective most recent Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K as filed with the
Penn National Gaming, Inc.
William J. Fair, 610-373-2400
Chief Financial Officer
Joseph N. Jaffoni, Richard Land, 212-835-8500