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Penn National Gaming Completes acquisition of Greektown Casino-Hotel
Friday 24 May 2019

24 May 2019 - Pennsylvania, US-based casino operator Penn National Gaming, Inc. (PENN: NASDAQ) has completed the purchase of the operations of Greektown Casino-Hotel in Detroit, Michigan from JACK Entertainment, LLC for approximately USD 300m in cash, the company said.

The transaction was financed with a combination of cash on hand and incremental borrowings under the company's revolving credit facility. The purchase price represents a multiple of approximately 6.3x anticipated annual run-rate adjusted EBITDA, inclusive of synergies to be realized within eighteen months.

Simultaneous with the closing of the transaction, Penn National entered into a triple net lease agreement with VICI Properties Inc. (NYSE: VICI) for the Greektown facility. The lease has an initial annual rent of approximately USD 55.6m and an initial term of 15 years, with four five-year renewal options.

The rent coverage ratio in the first year after closing is expected to be 1.8x.

Opened in 2000, Greektown Casino-Hotel features 100,000 square feet of casino space, approximately 2,700 gaming machines and 60 table games, a poker room, three restaurants, seven fast casual food outlets, four bars and a coffee shop.

In addition, the casino boasts a AAA Four Diamond 400-room, luxury high-rise hotel with 14,000 square feet of event and catering space.

The property employs approximately 1,700 team members and has partnered with nearly 20 local restaurants to offer fine dining rewards to guests. The Greektown property will be included in the company's Northeast reporting segment for financial reporting purposes.

Penn National Gaming owns, operates or has ownership interests in gaming and racing facilities and video gaming terminal operations with a focus on slot machine entertainment.

The company operates 42 facilities in 19 jurisdictions. In total, Penn National Gaming's facilities feature over 51,000 gaming machines, over 1,300 table games and 9,000 hotel rooms. The company also offers social online gaming through its Penn Interactive Ventures division and has customer loyalty programmes.
Details
Date Published: 24/05/2019
Target: Operations of Greektown Casino-Hotel in Detroit, Michigan
Country: USA
Deal Size: 300m (USD)
Sector: Hotels/Restaurants/Casinos/Catering
Type: Corporate acquisition
Financing: Cash
Status: Closed
Vendor: JACK Entertainment
Buyer: Penn National Gaming
Comment:
Simultaneous with the closing of the transaction, Penn National entered into a triple net lease agreement with VICI Properties Inc. (NYSE: VICI) for the Greektown facility.

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