VICI Properties said that it has entered into a definitive agreement with MGM Growth Properties and MGM Resorts International, in which it will acquire MGM Growth Properties for a total consideration of $17.2 billion.
The amount includes stock, cash distributed to MGM Growth Properties and $5.7 billion of MGM’s outstanding debt.
“Through this transformative strategic acquisition, we are merging MGP”™s best-in-class portfolio into VICI”™s best-in-class management and governance platform, creating the premier gaming, entertainment and leisure REIT in America,” said Ed Pitoniak, CEO of VICI Properties.
“We want to thank James Stewart, Andy Chien and the MGP Board for building and stewarding a portfolio of such exceptional quality, and going forward we are honored to become a key real estate and capital partner for Bill Hornbuckle and the MGM Resorts management team and Board. We look forward to supporting their strategic growth objectives for decades to come.”
Along with Empire City Casino, MGM Growth Properties owns a portfolio of 12 properties, including several resorts in Las Vegas and across the United States, MGM Northfield Park in Ohio and The Park, a retail and entertainment district in Las Vegas.
Its properties comprise 32,400 hotel rooms, 1.5 million square feet of casino space and 3.6 million square feet of convention space.
MGM acquired Empire City Casino from the Rooney family for $850 million in January 2019.
“After many years of growing both of our portfolios, combining them into one company will generate the best results for the shareholders of both companies,” said James Stewart, CEO of MGM Growth Properties. “The combined company will create a superior platform for delivering exceptional returns to MGP”™s existing shareholders, by improving diversification, increasing scale, lowering cost of capital and benefiting from future growth.”
VICI will also enter into an amended and restated triple-net master lease with MGM Resorts, with an initial total annual rent of $860.0 million, including MGP”™s pending acquisition of MGM Springfield, and an initial term of 25 years, with three 10-year tenant renewal options.
Along with that, VICI will take over MGM Growth Properties’ 50.1% ownership stake in its joint venture with Blackstone Trust, which owns the real estate assets of MGM Grand Las Vegas and Mandalay Bay.
VICI Properties currently owns 28 gaming facilities, including Caesars Palace, with 47 million square feet of space, 17,800 hotel rooms and more than 200 restaurants, bars, nightclubs and sportsbooks. It leases spaces to clients such as Caesars Entertainment, Inc., Century Casinos, Inc., Hard Rock International Inc., JACK Entertainment LLC and Penn National Gaming, Inc.
After the acquisition, VICI, which is based in New York City, will have acquired 29 properties and issued $15 billion in equity since its formation in 2017, and have an estimated enterprise value of $45 billion. Its portfolio will span 43 properties across 15 states.
