Edited press release
Penn National Gaming Inc. has entered into a definitive agreement to purchase Zia Park Racetrack and its Black Gold Casino for $200 million, the company announced Nov. 7.
The deal is subject to standard working capital and other adjustments, PNGI said. The acquisition will diversify the company's operations into the New Mexico gaming and racing market and is expected to be immediately accretive to earnings upon closing. Zia Park Racetrack & Casino in Hobbs, N.M., is owned by Zia Partners.
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. PNGI intends to fund the purchase with additional borrowings under its existing $750-million revolving credit facility, of which $357.5 million was drawn at Sept. 30, 2006.
Zia Park is an integrated Thoroughbred and Quarter Horse racetrack and gaming facility that offers a 49-day race meet. The facility's Black Gold Casino features 750 slot machines. In the 12 months that ended Sept. 30, 2006, Zia Park reported its operations generated about $69.7 million in revenue and $24.5 million in earnings before interest, taxes, depreciation and amortization.
PNGI chief executive officer Peter Carlino said: "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."
PNGI currently operates 16 facilities in 13 jurisdictions. Among its holdings are Charles Town Races & Slots in West Virginia and Penn National Race Course in Pennsylvania.