Gaming and Leisure Properties, Inc. (‘the Company’ or GLPI) has announced that it has entered into an amended agreement to acquire The Meadows Racetrack and Casino from Cannery Casino Resorts, LLC (‘Cannery’) for $440 million.
According to a release by GLPI, the deal is inclusive of $10 million previously paid and subject to certain adjustments. This resolution includes a settlement of all claims between GLPI and Cannery.
It was announced in May of 2014 that a deal was in place that would have seen GLPI acquire the Meadows for $465 million. It was then announced in the fall of 2014 that the deal was in jeopardy. GLPI had filed a lawsuit against Cannery alleging ‘fraud, breach of the membership interest purchase agreement and breach of a related consulting agreement.’ In response to the suit, Cannery stated at the time that it believed that the suit was without merit.
“We are pleased to resolve the Cannery litigation in a manner that we believe is positive for both companies,” commented Peter M. Carlino, the chairman and chief executive officer of gaming and leisure properties. “The amended agreement allows us to add the Meadows to our growing portfolio of high quality regional gaming assets at a price that is reflective of current property performance. The property has enjoyed improving performance in the second half of 2015 and we look forward to partnering with one of the many quality operators in the gaming industry to continue that momentum.”
“This resolution is a good outcome for CCR shareholders. All of the net sale proceeds will be used to reduce our debt and better position us for the future,” commented William Paulos, the co-CEO of Cannery Casino Resorts. “We are now focused on working with GLPI to ensure a smooth transition for our team members and customers.”
The Company is actively engaged in a search for a third party operator for the property, to whom the Company expects to sell the entities holding the licenses and operating assets, while retaining ownership of the land and buildings. The transaction is subject to and requires approval from the Pennsylvania Gaming Control Board and the Pennsylvania Harness Racing Commission and is expected to close in the second half of 2016. The transaction has an outside closing date of November 2016.
The purchase price, which the Company intends to fund with a combination of equity and debt, represents approximately 9.6 times the property’s LTM EBITDA.
The 180,000 square foot casino, which opened in 2007, contains 3,172 slot machines, 74 table games and 14 poker tables. In addition to the casino, the property includes 11 casual and fine dining restaurants, bars and lounges, a 24-lane bowling alley and a five-eighths-mile racetrack with a 500-seat grandstand. Additionally, a 154-room hotel, which is owned and operated by a third-party operator, opened in April 2015 and is located adjacent to the casino.
The release also states that Stifel served as financial advisor to Cannery Casino Resorts on the transaction.
(With files from GLPI and the Pittsburgh Post-Gazette)