It was announced today (Wednesday, May 14) that Gaming and Leisure Properties, Inc. (GLPI) has entered into an agreement which will see it acquire The Meadows Casino and Racetrack from Cannery Casino Resorts, LLC for $465 million.
A release by GLPI states that it will immediately begin a search for a third-party operator for the property, to whom GLPI expects to sell the entities holding the licenses and operating assets, while retaining ownership of the land and buildings.
In its release, GLPI states that it is engaged in the business of acquiring, financing, and owning real estate property to be leased to gaming operators in ‘triple net’ lease arrangements, pursuant to which the tenant is responsible for all facility maintenance, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.
Cannery Casino Resorts Co-CEO William Paulos has said that the deal is “terrific” for Cannery, furthering that the deal is a “great outcome for our employees, partners and customers at the Meadows. All net proceeds from this transaction will be used to reduce our debt."
The release states that the transaction is subject to and requires approval from the Pennsylvania Gaming Control Board and the Pennsylvania Racing Commission and is expected to close in 2015.
Gaming and Leisure Properties, Inc. is a Pennsylvania corporation that was incorporated on February 13, 2013 as a wholly-owned subsidiary of Penn National Gaming, Inc. On November 1, 2013, Penn completed the spin-off of GLPI by distributing the common stock it held in GLPI to Penn’s shareholders.
The contents of the GLPI release appear below.
Gaming and Leisure Properties Announces Acquisition of The Meadows Racetrack and Casino in Washington, Pennsylvania for $465 Million
WYOMISSING, Pa., May 14, 2014 (GLOBE NEWSWIRE) -- Gaming and Leisure Properties, Inc. (Nasdaq:GLPI) ("GLPI" or the "Company") today announced that it has entered into an agreement to acquire The Meadows Racetrack and Casino located in Washington, Pennsylvania, a suburb of Pittsburgh, Pennsylvania, from Cannery Casino Resorts, LLC for $465 million. The 180,000 square foot casino, which opened in 2007, contains 3,317 slot machines, 61 table games and 14 poker tables. In addition to the casino, the property includes 11 casual and fine dining restaurants, bars and lounges, a 24-lane bowling alley and a 5/8 mile racetrack with a 500-seat grandstand.
The purchase price, which the Company intends to fund with a combination of equity and debt, represents approximately 9 times the property's 2013 EBITDA. The purchase price reflects the expected stability of market competition and the robust local economy resulting from Marcellus Shale-related industry. The Company will immediately begin a search for a third party operator for the property, to whom the Company expects to sell the entities holding the licenses and operating assets, while retaining ownership of the land and buildings. The transaction, which is expected to be accretive immediately upon closing, is subject to and requires approval from the Pennsylvania Gaming Control Board and the Pennsylvania Racing Commission and is expected to close in 2015.
Peter M. Carlino, Chairman and Chief Executive Officer of Gaming and Leisure Properties, commented, "The acquisition of The Meadows represents another step in the execution of our strategy to grow our Company into the leading owner of high quality assets in key regional gaming markets. This acquisition is a prime example of how we are uniquely able to tailor transactions to suit the specific needs of sellers. We look forward to partnering with one of the many quality operators in the gaming industry and believe that this acquisition creates meaningful additional value for our shareholders."
William Paulos, Co-CEO of Cannery Casino Resorts, commented, "This is a terrific deal for CCR, and a great outcome for our employees, partners and customers at The Meadows. All net proceeds from this transaction will be used to reduce our debt."
A new 154-room hotel, to be owned and operated by a third party operator, is currently under construction adjacent to the casino and is expected to open in 2015. In addition, a new, third party retail center is currently planned, and the property contains developable space for an indoor event venue.
Stifel served as financial advisor to Cannery Casino Resorts on this transaction.