WYOMISSING, Pa.--(BUSINESS WIRE)--Penn National Gaming, Inc. (PENN: Nasdaq), announced today that it has entered into a definitive agreement to acquire RIH Acquisitions MS I, LLC and RIH Acquisitions MS II, LLC, the holding companies for the gaming operations of Bally’s Casino Tunica and Resorts Casino Tunica, for total consideration of approximately $44.0 million cash. With a purchase multiple of 3.7x trailing twelve months adjusted earnings before interest taxes depreciation and amortization (“EBITDA,” a non-GAAP financial measure defined below) after master lease payments, and a lower post-synergies pro-forma multiple, Penn National believes this transaction further supports the Company’s goal of enhancing shareholder value.
Timothy J. Wilmott, Penn National’s President and Chief Executive Officer, stated, “We are pleased to partner with Gaming and Leisure Properties to structure this tuck-in transaction which will be immediately accretive to our operating results upon closing. The acquisition will add two complementary casinos to our existing Hollywood Casino Tunica operations thereby presenting Penn National with the opportunity to benefit from a centralized local management structure. We intend to make modest cap-ex investments at the newly acquired casinos to elevate the guest experience while implementing our Marquee Rewards player loyalty program to allow guests to access Penn National’s growing portfolio of properties including our Tropicana Las Vegas resort.”
Following the completion of the proposed transaction, Penn National will operate both Tunica properties and lease the underlying real property associated with these two businesses from Gaming and Leisure Properties, Inc. (GLPI: Nasdaq) (“GLPI”) pursuant to the terms of the Company’s existing Master Lease with GLPI, with total initial annual rent of $9.0 million subject to the provisions included in the terms of the Master Lease. On a combined basis, Bally’s Casino Tunica and Resorts Casino Tunica generated adjusted EBITDA of approximately $21.0 million for the twelve month period ended December 31, 2016.
Bally’s Casino Tunica, the closest Tunica-area casino to downtown Memphis, features a 40,000 square foot casino with 947 slot machines and 16 table games, along with a steakhouse, buffet restaurant, 24-hour café, and a live entertainment venue. Resorts Casino Tunica, which is located adjacent to Penn National’s existing Hollywood Casino Tunica, features a 35,000 square foot casino with 800 slot machines and 9 table games. The property also offers a steakhouse, buffet restaurant and 24-hour café as well as 18,000 square feet of meeting and event space and a 201-room hotel.
The transaction, expected to close in the second quarter of 2017, is subject to the approval of the Mississippi Gaming Commission and other customary closing conditions.
About Penn National Gaming
Penn National Gaming is a diversified, multi-jurisdictional owner and manager of gaming and racing facilities and video gaming terminal operations. The Company recently expanded into social online gaming offerings via its Penn Interactive Ventures, LLC division and its recent acquisition of Rocket Speed, Inc. (formerly known as Rocket Games, Inc.). Penn National currently owns, manages, or has ownership interests in twenty-seven facilities in the following seventeen jurisdictions: California, Florida, Illinois, Indiana, Kansas, Maine, Massachusetts, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, Texas, West Virginia, and Ontario, Canada.
