Penn National is continuing its expansion plans with a new acquisition – the casino operator has most recently decided to roll the dice and bank on the value of Boston City-based Margaritaville Resort Casino. Though an official press release delivered last Tuesday (June 19), the Penn National team revealed that the company had entered into a definitive agreement with Margaritaville Resort Casino to acquire its operations for about $115 million that is expected to immediately accretive to operating results upon closing. New York-based VICI Properties will acquire the real estate of the resort casinos for $261 million which sums up the all-cash transaction to nearly $376 million.
“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,” Penn National Gaming chief executive officer, Timothy J. Wilmott stated.
Opened in June 2013, Margaritaville Resort Casino boasts of 50 tables, 1,215 slots, 395 hotel rooms, a 1,000-seat theater and six restaurants. As noted by VICI properties’ chief executive officer, Ed Pitoniak, Margaritaville has been characterized by exceptional performance and is currently one of the leaders in the Bossier-Shreveport market despite being the newest casino in the region.
“We are very excited to announce the addition of Margaritaville Resort Casino to our growing portfolio of market-leading gaming, hospitality and entertainment destinations at an attractive cap rate. In addition, VICI is proud to partner with Penn National to strengthen our existing footprint in the Shreveport-Bossier region, and this partnership represents the first step in our strategy to diversify our roster of best-in-class gaming operators,” Ed Pitoniak said during the press release.
The folks over at Bossier Casino Venture and Margaritaville are equally as excited about the new acquisition. There is a lot of optimism that Penn National Gaming will continue to offer the same high-quality services that Margaritaville Resort Casino has been known for in its five years of operation. In addition to this, the sale is expected to create more opportunities for the employees at both companies while at the same time giving way for the introduction of more exciting gaming and entertainment offerings for the customers.
“This is a tremendously positive outcome for our crew members, our guests, and our community. Penn National Gaming offers outstanding opportunities for employees, a geographically diverse network of destination casinos for our guests, and a solid platform for potential future development to enhance the economic benefits to the community. I’d like to thank our over 1,050 amazing crew members for their daily dedication to providing memorable experiences for our guests. It is because of their efforts that we have achieved the success that has attracted a quality gaming company, such as Penn National Gaming, as an acquirer,” Barry Regula, Senior Vice President and General Manager of Margaritaville Resort Casino commented.