Penn unites with Vici for $376m Margaritaville acquisition

Penn unites with Vici for 6m Margaritaville acquisition

Penn National Gaming and Vici Properties have confirmed the $376m purchase of Louisiana’s Margaritaville Resort Casino.

Vici secured the land and real estate assets of the property for $261m, while Penn purchased the operating assets of Margaritaville for $115m.

Alongside the closing of this transaction, Penn National entered into a triple-net lease agreement with the company. The lease has an initial total annual rent of approximately $23.2 million and an initial term of 15 years, with four 5-year renewal options. The Tenant’s obligations under the lease are guaranteed by Penn National. The Company funded the net purchase price using available cash from its 2018 equity raising activities.

John Payne, President and Chief Operating Officer of VICI Properties commented: “Closing the Margaritaville acquisition in partnership with Penn National is a meaningful achievement coming within 15 months of the Company’s formation.

“The transaction is our first step towards fulfilling our objective to diversify our tenant roster with best-in-class gaming operators. Having known and worked with senior leaders at Penn National, I look forward to VICI Properties building a long-term mutually productive partnership with this world class operator.”

Payne added: “In addition to tenant diversity, this transaction also enhances our presence in the Bossier/Shreveport market with the acquisition of the newest facility in the market. Since opening in 2013, the Margaritaville Resort Casino has consistently been one of the leaders in the region. We look forward to working in partnership with Penn National to continue providing a high-quality experience for customers, employees and the community at large.”

David Kieske, Chief Financial Officer of VICI Properties also detailed: “With the closing of the Margaritaville transaction, we have deployed all of the net proceeds raised in our initial public offering last year at an aggregate cap rate of 9.3%.

“As we begin 2019, we still have all of the net proceeds from our recent and opportunistic $700 million equity raise and will use that cash to fund our already-announced Greektown acquisition and future growth opportunities. Indeed, no other American REIT raised as much primary equity in 2018 as VICI did, with our two equity raises totaling $2.1 billion of gross proceeds, or approximately 21% of the $10 billion of REIT primary equity raised in the year.

He continued: “When combined with the $1.0 billion of equity raised in our December 2017 private placement, we have raised over $3 billion of primary equity in less than 13 months. We are very gratified for the faith that institutional investors have placed in VICI and we believe that the growth of our institutional shareholder base is key to the institutionalisation of our sector. Moving forward, we will continue to carry out a strategy whereby we will finance growth with prudent leverage, while maintaining sufficient liquidity for long-term growth.”


Source: SBC News