Pinnacle Entertainment, Inc has agreed to acquire the Meadows Racetrack and Casino operations for $138 million from Gaming and Leisure Properties, Inc (GLP). Once the deal has been successfully completed, Pinnacle will take over the casino operations of Meadows and lease the underlying property from GLP for $25 million as the annual rent. A Hyatt Place hotel is located close by but is not part of the complex or the deal.
The Meadows Racetrack and Casino is located in Washington, Pennsylvania around 25 miles away from Pittsburgh. During the last 12 months it has generated net revenues of $289 million. The casino features 74 table games, 11 poker tables and 3,170 slot machines. It also contains a harness horse racetrack having a capacity of 500. The complex has a wide variety of dining and entertainment amenities in addition to a 7,500 sq. feet banquet hall and a large bowling center.
In a statement, Anthony Sanfilippo, Chief Executive Officer of Pinnacle Entertainment said,
The Meadows is an attractive gaming entertainment business, with a broad base of operations and high quality gaming and non-gaming amenities. The Meadows will complement our existing collection of terrific properties and provide additional operational scale, geographic diversification, and another wonderful location, the greater Pittsburgh area, for the guests of Pinnacle Entertainment to visit
This was a strategic acquisition by Pinnacle Entertainment as with the completion of this acquisition, the company now has gaming facilities spread across 16 locations in 10 states covering 14 gaming markets of U.S.
Sanfilippo stated that the merger would enhance Meadow’s performance by providing it with a number of new benefits such as participating in the group’s loyalty program mychoice player, better marketing and database management and improved operating efficiencies.
GLP’s deal with Pinnacle is part of a bigger transaction as GLP is buying the Meadows facility from its existing owner, Cannery Casino Resorts LLC for a sum of $440 million. GLP intends to retain only the real estate portion. The company will hold the land and the buildings in a real estate investment trust, while selling the casino license and its operations to Pinnacle.
Pinnacle is therefore leasing the land and building with a Triple Net Lease agreement under which it leases the land for an initial rent of $25.5 million, going up to $31 million in the coming years.
Both deals are expected to be finalized during the third quarter of this year, after the regulatory bodies of Pennsylvania Gaming Control Board and Pennsylvania Harness Racing Commission approves the acquisition.