Penn National to acquire the operations of Margaritaville
June 21, 2018 9:02 AM
by Robert Mann
Penn National Gaming, the country’s largest regional gaming operator, has revealed it has entered into a definitive agreement to acquire the operations of Margaritaville Resort Casino in Bossier City, Louisiana.
Under the proposed transaction, VICI Properties, the Caesars Entertainment real estate trust spin-off, will acquire land and real estate assets of Margaritaville Resort Casino for $261 million in cash, while Penn National Gaming will buy the operating assets of the casino for $115M cash.
Timothy J. Wilmott, Penn National’s Chief Executive Officer, said, “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.”
Upon closing, Penn National said it would enter into a triple-net lease agreement with VICI for the Margaritaville facility. The lease will have an initial annual rent of approximately $23 million and an initial term of 15 years, with four 5-year renewal options.
Taking into account previously announced divestitures, Penn National’s portfolio of regional gaming facilities will increase to 40 properties in 18 jurisdictions.
The Margaritaville property features 26,500 square feet of casino space, 395 hotel rooms, an island-style escape theme, 6 restaurants and food and beverage outlets, a 15,000 square foot 1,000-seat theater and 9,500 square feet of meeting space.
The transaction, expected to close in the second half of 2018, is subject to customary regulatory approvals including that of the Louisiana Gaming Control Board.
The Margaritaville-themed resort is owned by Bossier Casino Ventures (BCV). The company reached a deal to sell the property last year to an Alabama tribal casino operator, but that deal fell through over a dispute regarding the term of the licensed usage of the Jimmy Buffet-inspired and owned name.