Eldorado Resorts and Gaming and Leisure Properties said Monday that the companies have officially closed on their $1.85 billion joint acquisition of Tropicana Entertainment, covering seven casino-resorts in six states.
Reno-based Eldorado acquired the operations of the casinos, and GLPI, a real estate investment trust, acquired the land and buildings associated the with the properties. Eldorado has entered into a 15-year master lease with GLPI to lease the Tropicana operations.
Reno-based Eldorado is now one of the country’s largest regional casino operators, controlling 26 casinos in 12 states. Collectively, the company’s holdings include approximately 36,000 slot machines, 12,000 hotel rooms and 20,000 employees.
“Our acquisition of Tropicana marks a continuation of Eldorado’s successful history of rapid growth through strategic, accretive acquisitions,” Eldorado Chairman Gary Carano said in a statement. “Through this combination, we have significantly expanded the scale of our gaming operations, further diversified our geographic reach into new markets – some of which have already adopted sports wagering legislation – and minimized market-specific risk.”
In August, Eldorado acquired the Grand Victoria casino in Elgin, Illinois.
Eldorado is acquiring the Tropicana Laughlin and the MontBleu Resort in South Lake Tahoe, which – with its three flagship resorts in Reno – would give the company five properties in Nevada. In addition, the company is acquiring Tropicana Atlantic City; Tropicana Evansville in Indiana; Belle of Baton Rouge in Louisiana; Trop Casino Greenville in Mississippi; and Lumière Place in St. Louis.
Tropicana Entertainment was formerly owned by corporate raider Carl Icahn.
GLPI CEO Peter Carlino said the transaction “materially increases our real estate income and further diversifies our geographic base. The addition of Eldorado as a new tenant diversifies our cash flow and offers a new partner for potential future transactions.”
The company now owns more than 40 casinos and racetrack casinos across 15 U.S. states. Penn National Gaming is the primary operator of casinos owned by GLPI.
Last week, Eldorado named Thomas Reeg as CEO. Reeg had been the company’s president and chief financial officer. He replaced Carano, whose title will change to executive chairman.
“With the acquisition of seven Tropicana properties, Eldorado enters two new gaming jurisdictions and adds financial and geographic diversity to our operating base,” Reeg said in a statement.
Reeg identified “$40 million” in cost savings from the transaction that the company “expects to realize” over the next 12 months. He said the financing structure with GLPI owning the casinos “allows us to maintain financial flexibility for leverage reduction and continued transactional growth.”
Reeg told Nevada gaming regulators last month that Eldorado’s debt will increase from $2.3 billion to $3.8 billion due to the Tropicana purchase.
Shares of Eldorado closed at $48.61 on the Nasdaq Monday, up 1 cent or o.02 percent. GLPI was down 8 cents or 0.23 percent to close at $35.17 on the Nasdaq.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
