Acquisition of Iconic Las Vegas Strip Property Scheduled to Close on
August 25
Penn National Gaming, Inc. (PENN: Nasdaq) (“the Company,” or “Penn
National”) announced that it received approval today from the Nevada
Gaming Commission (“NGC”) to complete the Company’s planned $360 million
acquisition of Tropicana Las Vegas. The NGC’s approval represents the
final step in the regulatory process to finance and acquire the property
following earlier approvals in several other jurisdictions where the
Company operates. Penn National plans to complete the purchase of
Tropicana Las Vegas on August 25, 2015.
“The addition of Tropicana Las Vegas to our national portfolio of gaming
assets is an exciting and important milestone for Penn National as it
fulfills our longstanding strategic objective to acquire the right
resort at the right price on the Las Vegas Strip. Tropicana Las Vegas
will allow us to leverage our database of nearly 3 million active
regional gaming customers while further diversifying our operations with
another wholly-owned asset,” said Timothy Wilmott, Chief Executive
Officer of Penn National Gaming. “Our regional gaming customers have
long asked us to offer them an attractive destination on the Las Vegas
Strip. After our disciplined search, we believe the iconic Tropicana Las
Vegas will successfully address customer demand for a Strip property
while enhancing our already strong competitive position in the local
markets where we operate. Furthermore, the Tropicana Las Vegas is
ideally suited to benefit from significant investment at adjacent gaming
properties which is expected to generate additional traffic in the area.”
Tropicana Las Vegas is situated on a 35-acre land parcel at the corner
of Tropicana Boulevard and Las Vegas Boulevard, approximately 2.5 miles
from McCarran International Airport at the southern end of the Las Vegas
Strip. The property has undergone over $200 million of upgrades over the
past four years, including renovations of all its nearly 1,500 guest
rooms. Other amenities 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,
and a five-acre tropical beach event area and spa.
As previously announced, Penn National has developed a two-phase plan to
realize the full value of the transaction, which it expects to implement
over the next three to five years. In the first phase, scheduled to
occur over the next 6-9 months, the Company will invest approximately
$20 million in further facility improvements and integration activities.
These will include upgrading the property’s existing technology
infrastructure to allow for the integration of Penn National’s
nationwide player loyalty program, Marquee Rewards, at Tropicana Las
Vegas, with the goal of launching the program in the second quarter of
2016. In the second phase, the Company plans to evaluate other potential
facility enhancements at the property, such as the addition of retail
space, food and beverage outlets, casino floor improvements and
potentially additional hotel rooms. The scope, budget and timing of any
such expansion and improvements will be determined based upon Penn
National’s operation of the property and customer demand for additional
amenities.
In June, Penn National named Bob Sheldon to the newly created role of
President of Las Vegas Operations, subject to customary regulatory
approvals. In this role, Mr. Sheldon has direct oversight of all aspects
of the operations of both Tropicana Las Vegas and M Resort Spa Casino in
Henderson, NV and is responsible for building a strong local leadership
team that will implement the Company’s operating, guest service and
growth strategies at Tropicana. Reporting to Mr. Sheldon at Tropicana
will be General Manager Philippe Khouri, who most recently served as
General Manager of the Company’s Argosy Alton property. Mr. Khouri will
assume his role effective immediately.
Mr. Wilmott concluded, “We believe the addition of Tropicana Las Vegas
to our regional gaming property portfolio will enable us to drive
significant long-term shareholder value. We look forward to closing on
the acquisition next week and, as our capital spending programs are
implemented, welcoming our guests from across the country to the Las
Vegas Strip.”
About Penn National Gaming
Penn National Gaming owns, operates or has ownership interests in gaming
and racing facilities with a focus on slot machine entertainment. At
June 30, 2015, the Company operated twenty-six facilities in seventeen
jurisdictions, including Florida, Illinois, Indiana, Kansas, Maine,
Massachusetts, Maryland, Mississippi, Missouri, Nevada, New Jersey, New
Mexico, Ohio, Pennsylvania, Texas, West Virginia, and Ontario. At June
30, 2015, in aggregate, Penn National Gaming’s operated facilities
featured approximately 32,000 gaming machines, 760 table games and 3,100
hotel rooms.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements can be identified by the use of forward looking terminology
such as “expects,” “believes,” “estimates,” “projects,” “intends,”
“plans,” “seeks,” “may,” “will,” “should” or “anticipates” or the
negative or other variations of these or similar words, or by
discussions of future events, strategies or risks and uncertainties,
including future plans, strategies, performance, developments,
acquisitions, capital expenditures, and operating results. Actual
results may vary materially from expectations. These forward looking
statements are inherently subject to risks, uncertainties and
assumptions about Penn National Gaming and its subsidiaries, including
risks related to the occurrence and the timing of the closing, the
closing of related financing and higher leverage, the successful
integration of the acquisition, our ability to successfully leverage our
player database, market conditions affecting the Las Vegas Strip and
regional gaming, costs relating to ongoing litigation in which Tropicana
Las Vegas is involved, labor relations, the impact of future capital
expenditures, the risks associated with construction projects (such as
delays and unexpected costs) and the availability and cost of capital
and accordingly, any forward looking statements are qualified in their
entirety by reference to the factors discussed in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2014, as well as any
subsequent Quarterly Reports on Form 10-Q and Current Reports on Form
8-K, each as filed with the United States Securities and Exchange
Commission. The Company does not intend to update publicly any
forward-looking statements except as required by law. In light of these
risks, uncertainties and assumptions, the forward-looking events
discussed in this press release may not occur.
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