Twin River enters Indiana with Tropicana Evansville acquisition

New York-listed casino operator Twin River Worldwide Holdings has entered into an agreement to acquire the Tropicana Evansville casino in Indiana from Caesars Entertainment for $140m.

The deal will see Twin River also acquire unencumbered rights to sports betting and iGaming skins associated with the Evansville operations to access the growing Indiana market.

As part of the acquisition, Gaming and Leisure Properties (GLPI) will acquire the Evansville casino real estate for $340m and lease it back to Twin River for $28m per year in rent, subject to escalation. GLPI will also acquire the real estate at Twin River's Dover Downs venue in Delaware for $144m and lease it back to Twin River at $12m per year.

The total consideration for the transaction represents an implied proforma purchase multiple of 4.4x EBITDA for 2019, after accounting for $28m in expected annual rent payments to GLPI with respect to the Evansville property.

As a result of the transaction structure, Twin River will make the acquisition without any cash outlay. The transaction is expected to close in mid-2021, subject to receipt of required regulatory approvals and other customary closing conditions.

“This transaction is consistent with our core strategy of acquiring strategic gaming assets at attractive valuations and, importantly, represents the company's entry into a 10^th state,” said Twin River president and CEO George Papanier. “It also provides us with access to an attractive Indiana gaming market, in which we will look to significantly advance our mobile and online sports betting and iGaming initiatives.

“We believe this property is a great fit for our portfolio. We are acquiring the operations at a value accretive multiple, while also enhancing our interactive offerings.”

Caesars Entertainment CEO Tom Reeg added: “I want to thank all of our Evansville Team Members for their hard work and dedication, especially during the COVID-19 pandemic, and we wish them the best under Twin River's ownership.” 

Following the acquisition, and taking into account four additional properties currently under contract, Twin River will operate 15 properties across ten US states.

Shares in Twin River Worldwide Holdings Inc (NSQ:TRWH) closed down by 2.80 per cent at $23.95 per share in New York Tuesday, while shares in Caesars Entertainment Inc (NSQ:CZR) were down 6.36 per cent at $48.47.