Penn National Gaming Acquisition of Greektown Casino Hotel Completed

At the beginning of the month, Penn National Gaming announced its intention for purchasing operations of the Greektown Casino Hotel in Detroit, Michigan.

Now the sale is final for…

… approximately $300 million in cash!

The transaction was financed with a combination of incremental borrowings under the company’s revolving credit facility and cash on hand.

The anticipated annual run-rate adjusted EBITDA, inclusive of synergies to be realized within eighteen months, represents a multiple of approximately 6.3x of the purchase price.

Simultaneous with the closing of the transaction, a triple-net lease agreement with VICI Properties Inc and Penn National entered was made for the Greektown facility.

According to the lease, an initial annual rent is approximately…

… $55.6 million.

An initial term is 15 years, with four 5-year renewal options.

In October 2018, Penn National took the full ownership of the Las Vegas-headquartered company, Pinnacle Entertainment.

Soon after that, in January of 2019, the company bought a resort in Louisiana – that is how Margaritaville Resort Casino in Bossier City become part of the company’s assets.

Big Prospects

In the words of Penn National’s Chief Executive Officer, Timothy J. Wilmott, the company is…

… “very pleased to be entering one of the nation’s largest regional gaming markets, and to be operating the only casino in the heart of the revitalized downtown Detroit area.”

According to his statement, Penn is looking forward to welcoming patrons from high-profile, nearby attractions. The ones like Comerica Park, Ford Field, Little Caesars Arena, the city’s theater district, GM’s Renaissance Center and the Cobo Conference Center.

“We’re also excited to be adding the largest single property customer database to my choice, our soon-to-be re-launched and enhanced player loyalty program,” he added.

In conclusion, Wilmott states:

“Our expanded scale will allow us to generate synergies over the first six quarters of operations, at which time we anticipate an OpCo purchase multiple of 6.3x projected annual run-rate adjusted EBITDA. With the expected increase to our free cash flow per share, we will remain well positioned to reduce lease-adjusted net leverage to 5.0x to 5.5x by the end of next year.”

About Penn National

Penn owns, operates or has ownership interests in gaming and racing facilities. In the area of the video gaming terminal operations, its focus lays on slot entertainment.

With a total of 42 facilities, with the latest acquisition of Greektown Casino, the company now operates in 19 jurisdictions.

In total, Penn’s facilities include:

• About 51,000 gaming machines
• Over 1,300 table games
• 9,000 hotel rooms

Financial report Q4 of 2018 reveals a hugе leap in the brand’s revenue and according to the company’s data, the numbers are rising in this year as well.

Features of Greektown Casino Hotel

Greektown is one of the largest luxurious venues of this type in Detroit. Since it’s opening in 2000, its features are attracting both players and tourists from all parts of the nation.

Due to its convenient location in the Greektown Historic District and the proximity to Downtown, it is the common choice for all kinds of celebrations and corporate events.

Here’s what’s inside…

• 100,000 square feet of casino space,
• Approximately 2,700 gaming machines and
• 60 table games,
• A poker room,
• 400-rooms
• Luxury high-rise hotel with 10,000 square feet of event and catering space
• 5 restaurants
• Four bars
• 2 coffee shops

This tourist and gambling haven employs about 1,700 team , and it has partnership agreements with nearly 20 local restaurants in order to offer the best dining experience to its guests.

With so many amazing features, Greektown represent a valuable addition to the already astonishing portfolio of the Penn National.

Source:

“Penn National Gaming Acquires Greektown Casino”, europeangaming.eu, May 27, 2019.