Pinnacle Entertainment (PNK) to Acquire Ameristar Casinos (ASCA) for $26.50/Share
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Price: $26.33 -0.11%
Overall Analyst Rating:
NEUTRAL (
Down)
Dividend Yield: 1.9%
EPS Growth %: +195.2%
Overall Analyst Rating:
NEUTRAL (
Down)Dividend Yield: 1.9%
EPS Growth %: +195.2%
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Pinnacle Entertainment, Inc. (NYSE: PNK) and Ameristar Casinos, Inc. (Nasdaq: ASCA) announced today that the companies have entered into a definitive agreement under which Pinnacle will acquire all of the outstanding common shares of Ameristar for $26.50 per share in cash, for a total enterprise value of $2.8 billion, including debt of $1.9 billion and cash on hand of $116 million as of September 30, 2012. This consideration represents a premium of 45% over the average closing price of Ameristar common stock for the 90 days ended December 20, 2012. The transaction has received the unanimous approval of both the Ameristar and Pinnacle Boards of Directors.
Pinnacle will benefit from increased operational and geographic diversity by more than doubling in size to 17 operating properties in 13 distinct geographies. The acquisition of Ameristar's properties will complement Pinnacle's existing portfolio by adding eight casino-resorts in some of the nation's best gaming markets, including: St. Charles near St. Louis, MO; Kansas City, MO; Council Bluffs, IA; Black Hawk, CO; Vicksburg, MS; East Chicago, IN; and Jackpot, NV.
The consideration represents an EBITDA multiple of 7.6x Ameristar's Adjusted EBITDA of $365 million for the trailing 12-month period ended September 30, 2012, excluding synergies Pinnacle expects to achieve. The combined enterprise would have generated net revenue of $2.4 billion and Combined Adjusted EBITDA of $649 million (excluding $40 million of synergies Pinnacle expects to achieve), over the trailing 12-month period ended September 30, 2012.
The transaction is subject to customary closing conditions, approval by Ameristar's shareholders and required regulatory approvals. Pinnacle expects the transaction to close by the end of the third quarter of 2013. Pinnacle has obtained committed financing for the transaction and the transaction is not subject to a financing contingency.
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Pinnacle will benefit from increased operational and geographic diversity by more than doubling in size to 17 operating properties in 13 distinct geographies. The acquisition of Ameristar's properties will complement Pinnacle's existing portfolio by adding eight casino-resorts in some of the nation's best gaming markets, including: St. Charles near St. Louis, MO; Kansas City, MO; Council Bluffs, IA; Black Hawk, CO; Vicksburg, MS; East Chicago, IN; and Jackpot, NV.
The consideration represents an EBITDA multiple of 7.6x Ameristar's Adjusted EBITDA of $365 million for the trailing 12-month period ended September 30, 2012, excluding synergies Pinnacle expects to achieve. The combined enterprise would have generated net revenue of $2.4 billion and Combined Adjusted EBITDA of $649 million (excluding $40 million of synergies Pinnacle expects to achieve), over the trailing 12-month period ended September 30, 2012.
The transaction is subject to customary closing conditions, approval by Ameristar's shareholders and required regulatory approvals. Pinnacle expects the transaction to close by the end of the third quarter of 2013. Pinnacle has obtained committed financing for the transaction and the transaction is not subject to a financing contingency.
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