WYOMISSING, Pa.--(BUSINESS WIRE)--Penn National Gaming, Inc. (PENN: Nasdaq) (the “Company,” or “Penn National”) announced today that it entered into a definitive agreement to acquire Illinois video gaming terminal (“VGT”) operator Prairie State Gaming (“PSG”) in an all cash transaction. One of the largest VGT route operators in Illinois, PSG’s operations include more than 1,100 terminals across a network of 270 bar and retail gaming establishments throughout the State. For the twelve-months ended June 30, 2015, PSG generated nearly $10 million in EBITDA (earnings before interest, taxes, depreciation and amortization). The transaction, which is expected to be immediately accretive to Penn National upon closing later this quarter, is subject to regulatory and other customary approvals and conditions.
Jay Snowden, Chief Operating Officer of Penn National Gaming, commented, “The planned acquisition of PSG is consistent with our proven long-term strategy for growth through accretive acquisitions. PSG is one of Illinois’ most respected VGT operators, with a strong track record of regulatory compliance and a reputation for reliable around the clock service backed by one of the industry’s most experienced teams. With its strong financial position, PSG has also distinguished itself in the Illinois VGT industry for its ability to quickly roll out new games to customers.
“Penn National looks forward to adding our nearly two decades of industry leading experience in marketing, player development and operating electronic casino games in highly regulated environments,” added Snowden. “We believe this acquisition will provide us a solid platform for future growth in the Illinois VGT market and potentially other states where this form of gaming is authorized,” concluded Snowden.
John Canham, current acting General Manager at Hollywood Casino at Kansas Speedway, will assume the newly created role of General Manager of VGT Operations for Penn National, subject to customary regulatory approvals. Mr. Canham will report directly to Ameet Patel, Senior Vice President, Regional Operations for Penn National.
Throughout his 36-year gaming industry career, Mr. Canham has served in many diverse roles. Prior to assuming the role of acting General Manager at Hollywood Casino at Kansas Speedway, he served as Vice President of Casino Operations at the property beginning in 2014. Before that he was Director of Operations at Boomtown Biloxi from 2008 to 2014, during which time he spent two years in a corporate slot role with responsibility for negotiating Master Purchase Agreements with slot manufacturers and other special projects. Mr. Canham previously served in various roles at Hollywood Casino Baton Rouge from 1994 to 2008 including Table Games Manager and Slot Operations Manager. He began his career with London Clubs in England and subsequently worked in a variety of supervisory and management positions in a number of casinos internationally, including Crystal Palace Casino in the Bahamas and Casino Jasmine in Cyprus.
Rob Miller, founder and president of PSG, will remain with the company as a strategic advisor and will be working closely with Mr. Canham to ensure a smooth transition and to continue supporting PSG’s retail gaming, bar, restaurant, and veteran organization customers.
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.
About Prairie State Gaming
Prairie State Gaming (PSG) was founded by gaming entrepreneur Rob Miller with financing from an affiliate of Och-Ziff Real Estate. PSG is one of the top five largest terminal operators in Illinois, with more than 1,100 VGTs across 270 bar and retail gaming establishments in seven distinct geographic areas throughout Illinois. PSG operates a portfolio of multi-title VGTs under long-term placement agreements, while also providing a range of ancillary amusement and gaming equipment to its customers.
Wells Fargo Securities is acting as financial advisor to PSG in this matter.
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 required regulatory approvals and other conditions to closing, the successful integration of the acquisition, our ability to successfully compete in the VGT market, our ability to retain existing customers and secure new customers, risks relating to municipal authorization of VGT operations 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.