American casino operator Penn National Gaming has announced it will acquire Pinnacle Entertainment in a $2.8bn deal.
Pinnacle shareholders will see each share invested in the operator of 16 US gaming and entertainment facilities, earn $20 and 0.42 shares of PNG common stock.
“By combining our highly complementary portfolios and similar operating philosophies, we will be able to leverage the strengths of both our companies,” said Timothy J. Wilmott, CEO of PNG.
After the deal PNG will own 78 percent of the two companies, operating a combined total of 41 properties, over 53,500 slots and 1,300 tables, with $100m in cost synergies predicted within the first year.
The purchase is financed by Merrill Lynch and Goldman Sachs, alongside a $315m sale and leaseback of Belterra Park and Plainridge Park Casino with Gaming Leisure Properties.
$575m will also be raised through selling Pinnacle Ameristar operations in Kansas and Missouri, and Belterra properties in Indiana and Ohio.
“Pinnacle is a terrific company whose success is due to the efforts of our more than 16,000 team members,” said Anthony Sanfilippo, chairman and CEO of Pinnacle Entertainment.
“The combination will produce an even stronger gaming entertainment platform.”