MGM Resorts International And MGM Growth Properties Announce Transaction On MGM Springfield
MGM Resorts and MGM Growth Properties have finalized an agreement for MGP to acquire the real estate assets of MGM Springfield in Western Massachusetts for approximately $400 million in cash. Following the transaction, MGM Resorts will continue operating the property under a master lease with an increased annual rent of $30 million. The sale is expected to close in Q4 2021, pending regulatory approvals. Both companies view this deal as beneficial for shareholders, with MGM Springfield showing strong financial performance, delivering record Adjusted Property EBITDAR in Q1 2021.
- Transaction enhances asset-light strategy for MGM Resorts.
- MGM Springfield demonstrated record financial performance post-pandemic.
- Increased annual rent of $30 million beneficial for MGP's revenue.
- None.
LAS VEGAS, May 11, 2021 /PRNewswire/ -- MGM Resorts International ("MGM Resorts") (NYSE: MGM) and MGM Growth Properties LLC ("MGP") (NYSE: MGP) announced today that they have entered into a definitive agreement whereby MGP will purchase the real estate assets associated with MGM Springfield in Western Massachusetts. MGM Resorts will lease the property from MGP and continue to operate the property following the consummation of the transaction, with no expected change to its employees, vendors, customers, and the community.
MGP will pay total consideration of approximately
MGM Springfield will be added to the existing Master Lease between MGM Resorts and MGP, and the rent payment to MGP will increase by
"We are pleased to announce today's transaction with MGM Growth Properties, which we believe serves the best interests of the shareholders of both companies and further advances our asset-light commitment," said Bill Hornbuckle, CEO and President of MGM Resorts. "MGM Springfield has exhibited strong financial performance as it emerges from the pandemic, and the property delivered record Adjusted Property EBITDAR in the first quarter of 2021."
James Stewart, CEO of MGM Growth Properties, said, "We are excited to add MGM Springfield to our portfolio of high-quality gaming resort real estate and are encouraged by the property's recent record financial performance. This transaction reflects the continued execution of our growth strategy, will be immediately accretive to AFFO per share upon closing and further strengthens our master lease with MGM."
As of March 31, 2021, MGM Resorts held a 42 percent economic interest in the operating partnership of MGP.
Evercore served as financial advisor to the Conflicts Committee of MGP's Board of Directors.
About MGM Resorts International
MGM Resorts International (NYSE: MGM) is an S&P 500® global entertainment company with national and international locations featuring best-in-class hotels and casinos, state-of-the-art meetings and conference spaces, incredible live and theatrical entertainment experiences, and an extensive array of restaurant, nightlife and retail offerings. MGM Resorts creates immersive, iconic experiences through its suite of Las Vegas-inspired brands. The MGM Resorts portfolio encompasses 31 unique hotel and gaming destinations globally, including some of the most recognizable resort brands in the industry. The Company's 50/50 venture, BetMGM, LLC, offers U.S. sports betting and online gaming through market-leading brands, including BetMGM and partypoker. The Company is currently pursuing targeted expansion in Asia through the integrated resort opportunity in Japan. Through its "Focused on What Matters: Embracing Humanity and Protecting the Planet" philosophy, MGM Resorts commits to creating a more sustainable future, while striving to make a bigger difference in the lives of its employees, guests, and in the communities where it operates. The global employees of MGM Resorts are proud of their company for being recognized as one of FORTUNE® Magazine's World's Most Admired Companies®. For more information, please visit us at www.mgmresorts.com. Please also connect with us @MGMResortsIntl on Twitter as well as Facebook and Instagram.
About MGM Growth Properties
MGM Growth Properties LLC (NYSE:MGP) is one of the leading publicly traded real estate investment trusts engaged in the acquisition, ownership and leasing of large-scale destination entertainment and leisure resorts, whose diverse amenities include casino gaming, hotel, convention, dining, entertainment and retail offerings. MGP, together with its joint venture, currently owns a portfolio of properties, consisting of 12 premier destination resorts in Las Vegas and elsewhere across the United States, MGM Northfield Park in Northfield, OH, Empire Resort Casino in Yonkers, NY, as well as a retail and entertainment district, The Park in Las Vegas. As of December 31, 2020, MGP's portfolio of destination resorts, the Park, Empire Resort Casino, and MGM Northfield Park collectively comprised approximately 32,400 hotel rooms, 1.6 million casino square footage, and 3.6 million convention square footage. As a growth-oriented public real estate entity, MGP expects its relationship with MGM Resorts and other entertainment providers to attractively position MGP for the acquisition of additional properties across the entertainment, hospitality and leisure industries. For more information about MGP, visit the Company's website at http://www.mgmgrowthproperties.com.
Forward-Looking Statements
Statements in this release that are not historical facts are "forward-looking" statements and "safe harbor statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and/or uncertainties, including those described in each of MGM Resorts' and MGP's public filings with the Securities and Exchange Commission. Management of MGM Resorts and MGP have based forward-looking statements on their current expectations and assumptions and not on historical facts. Examples of these statements include, but are not limited to, the closing of the sale and any expected benefits to be realized as a result of the transaction. These forward-looking statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated in such forward-looking statements include effects of economic conditions and market conditions in the markets in which the companies operate and competition with other destination travel locations throughout the United States and the world, the design, timing and costs of expansion projects, risks relating to international operations, permits, licenses, financings, approvals and other contingencies in connection with growth in new or existing jurisdictions, delays or impediments to completing planned acquisitions or projects, the ultimate timing and outcome of any planned acquisitions or projects, MGP's ability to maintain its status as a REIT and additional risks and uncertainties described in each of MGM Resorts' and MGP's periodic reports filed with the Securities and Exchange Commission (including all amendments to those reports). In providing forward-looking statements, neither company is undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise, except as required by law. If either company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those other forward-looking statements.
MGM RESORTS INTERNATIONAL CONTACTS: | |
Investment Community | News Media |
JIM FREEMAN | BRIAN AHERN |
Senior Vice President, Capital Markets and Strategy | Director of Communications |
jfreeman@mgmresorts.com | media@mgmresorts.com |
MGM GROWTH PROPERTIES LLC CONTACTS: | News Media |
Investment Community | (702) 669-1480 or media@mgpreit.com |
ANDY H. CHIEN | |
Chief Financial Officer | |
(702) 669-1470 |
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SOURCE MGM Resorts International; MGM Growth Properties LLC
FAQ
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