Penn National Gaming has completed its previously announced acquisition of Pinnacle Entertainment Inc as well as the related divestitures to Boyd Gaming Corporation and the real estate transactions with Gaming and Leisure Properties Inc.
The transaction, said Penn, further enhances its position as North America’s leading regional gaming operator, with 40 facilities in 18 jurisdictions including Colorado, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Massachusetts, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, Texas, and West Virginia.
In aggregate, Penn National will now operate more than 49,000 gaming machines, 1,200 table games and nearly 9,000 hotel rooms, and employ more than 30,000 team members. The acquisition is expected to be accretive to the firm’s free cash flow per share in the first year after closing with approximately $100m in expected annual run-rate cost synergies and excluding one-time transaction costs.
CEO Timothy J. Wilmott commented: “Our acquisition of Pinnacle Entertainment marks a significant milestone in Penn National’s 24-year history of growth as a public company, which has been predicated on our unwavering commitment to deliver exceptional entertainment to customers, support for the local communities where we operate and enhancement of value for our shareholders.
“As the industry leader, Penn National is poised for continued growth with a portfolio of premiere gaming facilities and more than five million active customers in its player rewards database. With the expected incremental free cash flow to be generated from our expanded base of operations, we believe we are well positioned to reduce leverage, evaluate additional accretive strategic growth investments and opportunistically return capital to shareholders.
“We are pleased to welcome Pinnacle’s team members to Penn National. Our operating teams consistently deliver best-in-market gaming, entertainment and dining experiences for our customers. We expect to realize approximately $100m in cost-related synergies and expect to generate further revenue synergies through efforts such as monetizing our database; cross marketing our properties; sports wagering; and further leveraging our social gaming platform.”