Evansville Casino Parent to be Acquired

Tropicana Evansville had the highest gains in February.

The Tropicana Evansville casino will soon be under new ownership. Nevada-based Eldorado Resorts Inc. (Nasdaq: ERI) has announced plans to acquire Tropicana Entertainment Inc. in a $1.85 billion deal, which is expected to close by the end of the year.

Under the terms of the agreement, Pennsylvania-based Gaming and Leisure Properties (Nasdaq: GLPI) will pay $1.21 billion for the majority of Tropicana’s real estate and enter into a master lease agreement with Eldorado, which will also fund the remaining $640 million of the acquisition. Eldorado will lease the acquired properties for an initial term of 15 years with options for renewals of up to 20 years.

The acquisition includes the Tropicana Evansville casino, along with two casinos in Nevada, as well as casinos in Louisiana, Mississippi, Missouri and New Jersey. Gary Carano, chief executive officer of Eldorado, says the deal will increase the scale of the company’s regional gaming platform. 

"The acquisition of seven Tropicana Entertainment properties will allow Eldorado to enter two new gaming jurisdictions and deliver additional financial and geographic diversity to our operating base," said Carano. "We have identified $40 million of synergies that we expect to realize in the first year of our ownership. We believe the financing structure for the transaction, which includes the participation of a real estate investment trust, represents an innovative means to drive growth and add value for our shareholders while maintaining financial flexibility as we continue to own the majority of the underlying real estate across our remaining property portfolio."

Carano adds the casinos under the Tropicana portfolio are in good shape and Eldorado has no immediate plans for any capital expenditures for the properties.

Tropicana Evansville reopened as a land-based casino in October after more than 20 years as a riverboat casino.