American regional casino operator, Penn National Gaming Incorporated, has announced that it has spent some $115 million in order to complete the purchase of northern Louisiana’s Margaritaville Resort Casino.
Borrows to invest:
The Pennsylvania firm used an official Wednesday press release to declare that the agreement was financed via ‘incremental borrowings’ from its revolving credit facility with the final purchase price expected to be about five times higher than the Bossier City facility’s 2018 adjusted earnings before interest, tax, depreciation, amortization and management fees.
Concurrent rental arrangement:
The Wyomissing-headquartered operator explained that it has also inked an associated 15-year rental deal with the Vici Properties Incorporated real estate investment trust (REIT) that was spun off from Caesars Entertainment Corporation in 2017. It stated that this ‘triple net lease agreement’ contains four five-year renewals and is due to see the leasee pay $35 million a year for the right to run its latest Louisiana venue.
Enhancing ‘shareholder value’:
Timothy Wilmott, Chief Executive Officer for Penn National Gaming Incorporated, proclaimed that the 395-room Margaritaville Resort Casino is destined to become ‘an attractive addition to our regional gaming platform’. The 59-year-old executive additionally described the acquisition as being ‘in line with our efforts to enhance shareholder value’ as it will allow his firm to further diversify its revenue stream while offering ‘a well-defined path to the realization of synergies.’
Wilmott’s statement read…
“Margaritaville Resort Casino is one of the leading casino resorts in Bossier City and we expect that our proven integration and operating strategies will help grow operating margins as well as free cash flow contributions from the property. We are excited to welcome Margaritaville Resort Casino employees to Penn National Gaming Incorporated.”
Growing national portfolio:
Opened in 2013 complete with a 26,500 sq ft casino, Margaritaville Resort Casino moreover features six restaurants alongside 9,500 sq ft of meeting space and a 1,000-seat theater. Its acquisition by Penn National Gaming Incorporated means that the operator is now responsible for 41properties spread across the United States including L’Auberge Casino Hotel-branded facilities in the Louisiana communities of Baton Rouge and Lake Charles.