LAS VEGAS — Penn National Gaming Inc. (NASDAQ: PENN) has entered into a definitive agreement to acquire Tropicana Las Vegas Casino Hotel Resort from its shareholders, the largest of which is a partnership between Onex and Alex Yemenidjian, for $360 million. Penn National intends to fund the acquisition through an expansion of its existing credit facilities and cash on hand.
Tropicana Las Vegas sits on 35 acres at the corner of Tropicana Boulevard and Las Vegas Boulevard, 2.5 miles from McCarran International Airport on the southern end of the Las Vegas Strip. The property features nearly 1,500 guest rooms including 181 suites. Amenities at the property include a 50,000-square-foot casino with over 1,000 gaming positions, a sports book, three full-service restaurants, a food court, a 1,200-seat performance theater, the 300-seat Laugh Factory comedy club, over 100,000 square feet of exhibition and meeting space, a five-acre tropical beach event area and spa.
Over the past four years, Tropicana Las Vegas has completed more than $200 million of property upgrades including a complete renovation of all guest rooms, which feature a new South Beach theme. In addition, improvements were made to the ballroom, conference meeting space and Pavilion exhibition space, the showcase performance theater, restaurant and entertainment areas, and the facility’s infrastructure and mechanical systems. According to the 2015 Best of Las Vegas survey, published by the Las Vegas Review Journal, Tropicana Las Vegas garnered awards in several categories including Best Hotel Rooms, Best Hotel Suites and Best Hotel Room Value.
“The planned acquisition of Tropicana Las Vegas establishes a strong presence on the Las Vegas Strip for Penn National Gaming, fulfilling an important long-term strategic objective for the company,” says Timothy Wilmott, CEO of Penn National Gaming.
“With a $360 million acquisition cost, we believe we have structured a prudent transaction to own and operate a premier strip asset at an attractive price of entry. Tropicana Las Vegas is positioned to benefit from recent significant capital expenditures and includes 35 acres on one of the busiest and most famous intersections in Las Vegas. The property will also benefit from its proximity to the new 20,000-seat capacity MGM-AEG Arena scheduled to open in mid-2016,” adds Wilmott.
The transaction and credit facility expansions are subject to regulatory approvals, the expiration of the applicable Hart-Scott-Rodino waiting period and other customary closing conditions. The transaction is expected to be complete by the end of the year.
Penn National Gaming owns, operates or has ownership interests in gaming and racing facilities with a focus on slot machine entertainment. As of March 31, the company operated 26 facilities in 17 states, including Florida, Illinois, Indiana, Kansas, Maine, Massachusetts, Maryland, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, Texas, West Virginia and Ontario. In total, Penn National Gaming’s operating facilities featured approximately 31,000 gaming machines, 760 table games and 3,100 hotel rooms.
Penn National Gaming’s stock price closed at $16.11 on April 29, up from $11.15 one year ago.
— Haisten Willis