Penn National Gaming to acquire Zia Park Racetrack/Black Gold Casino
WYOMISSING, Pennsylvania – (PRESS RELEASE) --Penn National Gaming, Inc. (NASDAQ:PENN) announced today that it has entered into a definitive agreement to purchase the assets of Zia Partners, LLC, which are primarily comprised of Zia Park Racetrack and its Black Gold Casino on approximately 320 acres of land, for $200 million, subject to standard working capital and other adjustments. The acquisition will diversify Penn National's operations into the New Mexico gaming and racing market and is expected to be immediately accretive to earnings upon closing.
The transaction, which is anticipated to close mid-2007, is subject to customary closing conditions and approval by the New Mexico Gaming Control Board and New Mexico Racing Commission as well as other regulatory bodies. Penn National Gaming intends to fund the purchase with additional borrowings under its existing $750 million revolving credit facility of which $357.5 million was drawn at September 30, 2006.
Located in Hobbs, in eastern New Mexico, Zia Park is an integrated thoroughbred and quarterhorse racetrack and gaming facility that runs a 49-day race meet. The facility's Black Gold Casino features approximately 750 slot machines as well as the Black Gold Buffet and Black Gold Steakhouse and the Home Stretch Bar & Grill. In the twelve months ended September 30, 2006, Zia Park reported that its operations generated approximately $69.7 million in revenue and approximately $24.5 million in EBITDA (earnings before interest, taxes, depreciation and amortization).
Commenting on the acquisition, Peter M. Carlino, Chief Executive Officer of Penn National stated, "We're excited to be adding Zia Park to our diverse portfolio of successful racing and gaming properties, and to be entering a market where the state has worked collectively with racing and gaming to create a favorable environment. Zia Park is an attractively valued acquisition that is just two years old and does not require significant capital expenditures. The facility's success in attracting patrons from west Texas has driven revenue growth during its first two years of operations. We look forward to completing this transaction and welcoming Zia Park employees to Penn National."