Pinnacle EntertainmentInc. reached a definitive agreement to purchase the operations of theMeadows Racetrack and Casino in Washington, Pa., from Gaming and Leisure Properties Inc. for $138.0 million.
After the deal closes, Pinnacle will operate the property's gamingbusiness and lease its underlying real estate from Gaming and Leisure, which iscurrently under contract to acquirethe racino from Cannery Casino Resorts LLC for $440 million.
Pinnacle will pay Gaming and Leisure an initial annual rent of$25.5 million, which is comprised of a $14 million base rent, subject to annualescalation, and a percentage rent of $11.5 million, according to a March 29 release.The percentage component of the rent payment resets every two years beginning inthe third year of the 10-year, triple-net lease by an amount equal to 4% of thechange in average net revenues for the trailing two-year cumulative period.
The property includes a casino with 3,170 gaming devices, 74table games, 11 poker tables and a 5/8 mile harness horse racetrack with a 500-seatgrandstand. The property also includes 7,500 square feet of banquet space, a bowlingalley, and 11 bars and restaurants. A separately owned and operated Hyatt Placehotel with 155 rooms is attached to the property.
Pinnacle expects to finance the acquisition with its $400 millionrevolving credit facility and cash on hand, President and CFO Carlos Ruisanchezsaid in a release.
The transaction is subject to the approvals of the PennsylvaniaGaming Control Board and Pennsylvania Harness Racing Commission, the expirationor termination of the applicable Hart-Scott-Rodino waiting period and other customaryclosing conditions. The deal is expected to close by the end of the third quarter.