Gaming and Leisure Properties Inc.(the "Company"), a corporate spin-off from Penn National Gaming last November, has announced that it has entered into an agreement to acquire The Meadows Racetrack and Casino, located in Washington, Pa., a suburb of Pittsburgh, from Cannery Casino Resorts, LLC for $465 million. Cannery purchased The Meadows in November 2006 for $200 million from Magna Entertainment.
Gaming and Leisure Properties also owns the new Dayton harness track/racino, Bangor Raceway, Penn National, the new Mahoning Valley track in Austintown, Ohio, near the Pennsylvania border, Charles Town Racetrack, plus the casinos in Columbus and Toledo, Ohio.
The 180,000 square foot Meadows 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 five-eighths-mile racetrack with a 500 seat grandstand.
The purchase price represents approximately nine times 2013 EBITDA, and the Company intends to fund the transaction with a combination of equity and debt. The purchase price reflects the foreseeable 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 will sell 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. (Gaming and Leisure Properties)