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Penn National Gaming acquires Margaritaville Casino2 January 2019(PRESS RELEASE) -- Penn National Gaming, Inc. announced today that it completed the purchase of the operations of Margaritaville Resort Casino Bossier City in Louisiana, 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 12 months adjusted earnings before interest, taxes, depreciation, amortization and management fee for the period ended 31 December 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. for the Margaritaville facility. The lease has an initial annual rent of approximately $23 million and an initial term of 15 years, with four five-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, six restaurants and food and beverage outlets, a 15,000 square foot 1,000-seat theater and 9,500 square feet of meeting space.
Penn National Gaming acquires Margaritaville Casino
is republished from CasinoVendors.com.
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