In tandem with the Florida kennel club buy, the locally based casino and racetrack company has also secured a right of first refusal for a majority stake in the Sarasota Kennel Club in Sarasota. All of these agreements were announced after the release of Penn National Gaming's second-quarter financials, and none of the financial details have been disclosed. Both assets provide geographic diversification, and each is subject to conditions and approvals.
Rosecroft Raceway opened in 1949 and is located on 130 acres in Prince George's County outside Washington, DC. In addition to the racetrack, it includes a simulcast wagering facility, clubhouse and dining area overlooking the track.
The seller is Fort Washington, MD-based Cloverleaf Enterprises Inc. The transaction requires the approval of CEI's stockholder, which is the Cloverleaf Standardbred Owners Association, and The Maryland Racing Commission. Penn National expects to complete due diligence and enter into a definitive agreement within approximately 30 days. According to public records, CEI refinanced nearly $7.5 million of debt on the property this January.
The seller of the kennel club in Longwood, FL is Sanford-Orlando Kennel Club Inc. and Collins & Collins. According to a Penn National statement, Jack Collins Sr. and members of his family own the Sarasota facility. Both are year-round greyhound racing venues. The Sanford-Orlando deal requires approval by Florida's Department of Business and Professional Regulation and is expected to close by year-end. The purchase price, according to the statement, "contemplates additional consideration to be paid by Penn National based upon certain future regulatory developments."
Sanford-Orlando is located on 26 acres and contains a simulcast wagering facility, clubhouse and two dining areas. The Sarasota property also contains a simulcast wagering facility, two dining areas and the One-Eyed Jacks card room, which has 24 poker tables.
In separate statements regarding each acquisition, Peter Carlino, Penn National's CEO, says the acquired assets extend the company's pari-mutuel presence and are consistent with its long-term strategy to acquire pari-mutuel facilities "that increase the scale and diversity of our operations." Of Sanford-Orlando, he adds, "the purchase consideration is attractive given the upside of the opportunity and the fact that Sanford-Orlando Kennel Club is cash flow positive."
Under its agreement with affiliates of Fortress/Centerbridge, Penn National was permitted to solicit rival bids for 45 days, and that time has passed. The existing management team, including Carlino, will remain in place and the company will go private. The acquisition requires FTC approval and is scheduled to close within 12 to 16 months.
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