New York-listed gaming and racing operator Penn National Gaming has completed the acquisition of Michigan land-based casino operator Greektown Casino-Hotel for $300m.
The acquisition from Jack Entertainment further expands and diversifies Penn National’s regional gaming portfolio to 42 properties in 19 jurisdictions.
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.
“We are pleased to be entering one of the nation’s largest regional gaming markets, and to be operating the only casino in the heart of the revitalized downtown Detroit area,” said Penn National Gaming CEO Timothy Wilmott. “We look forward to welcoming patrons from high profile nearby attractions, such as Comerica Park, Ford Field, Little Caesars Arena, the city’s theater district, GM’s Renaissance Center and the Cobo Conference Center.
Simultaneous with the closing of the transaction, Penn National entered into a triple net lease agreement with VICI Properties for the Greektown facility. The lease has an initial annual rent of approximately $55.6m and an initial term of 15 years, with four 5-year renewal options.
Opened in 2000, Greektown Casino-Hotel features 100,000 square feet of casino space, approximately 2,700 gaming machines, 60 table games, and a poker room.
Shares in Penn National Gaming Inc (NSQ:PENN) closed down 2.53 per cent at $20.83 per share in New York Thursday.