Penn National Gaming Completes Acquisition of Argosy Gaming Company
biz.yahoo.com
Monday October 3, 12:35 pm ET
WYOMISSING, Pa.--(BUSINESS WIRE)--Oct. 3, 2005--Penn National Gaming, Inc. (NASDAQ:PENN) announced today that it has completed the acquisition of Argosy Gaming Company (NYSE: AGY). As previously announced, Argosy stockholders are receiving $47.00 per share in cash for each share of common stock. The acquisition is valued at approximately $2.2 billion, including approximately $791.3 million of long-term debt of Argosy and its subsidiaries. The acquisition is expected to be immediately accretive to Penn National's earnings per share. Separately, Penn National announced today the closing of a $2.725 billion senior secured credit facility to fund the acquisition and to provide additional working capital.
Penn National acquired six Argosy casino entertainment facilities, although the Company has agreed to divest three of those properties to expedite the receipt of the regulatory approvals required to complete the merger. The Company has already entered into a definitive merger agreement to sell the Argosy Casino-Baton Rouge to Columbia Sussex for $150 million before working capital adjustments and the Company has until December 31, 2006 to enter into definitive sale agreements for the Alton and Joliet, Illinois properties.
Reflecting the planned divestitures, the combined company generates revenues in excess of $2 billion and its properties feature over 17,500 slot machines and approximately 575,000 square feet of casino space. With the completion of the transaction, Penn National has broadened its asset base to include ten gaming facilities, five pari-mutuel horse racing facilities (including two with slots soon to be added and a joint venture), six off-track wagering sites and the Company holds a Canadian casino management contract. Penn National now owns or operates gaming or pari-mutuel properties in thirteen North American jurisdictions.
Commenting on the closing of the acquisition, Peter M. Carlino, Chief Executive Officer of Penn National, said, "With this accretive transaction we further diversify the Company's sources of revenue and cash flow as we gain entree into Missouri, Iowa and Indiana with casinos, and operate an Ohio pari-mutuel facility. Penn National also adds two compelling growth opportunities to our existing slate of expansion initiatives while further building the critical mass of our gaming operations and broadening our gaming management resources.
"Penn National is very well positioned to continue generating strong earnings growth over the next several years based on the integration of the Argosy assets, the commencement of slot operations at our Maine and Pennsylvania facilitates, further property development at Charles Town Races and the completion of the Argosy Casino-Riverside and Argosy Casino-Lawrenceburg expansion projects. Our near-term focus is on a successful integration of the acquired properties and achieving the anticipated $20 million in corporate cost savings and synergies. Longer-term, after applying the proceeds from the divestiture of the three Argosy properties to reduce our debt, and with the expected earnings power of the combined entity and new sources of revenue and cash flow, we expect to generate significant free cash flow to further reduce debt, invest in our portfolio of properties and explore other areas to continue growing Penn National. We expect to provide revised 2005 guidance when we issue third quarter earnings results later this month. |
