Pinnacle to Acquire Ameristar Casinos for $869 Million
On Friday, Pinnacle Entertainment announced it has agreed to purchase Ameristar Casinos for $26.50 per share in cash. Including debt of $1.9 billion taken on, and minus cash on hand of $116 million, this works out to an enterprise value of $2.8 billion. Both companies' boards have endorsed the deal.
Pinnacle noted in a statement that the merger will more than double its size to 17 operating properties located in 13 distinct geographies, "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."
Combined, the two operations will boast annual net revenues of $2.4 billion and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $649 million, and potentially more, if Pinnacle succeeds in creating anticipated cost synergies of $40 million. The parties expect to close the deal by the third quarter of 2013.
As of this writing shares of Pinnacle are up 18.9% at $15.87 per share. Ameristar is doing even better, up 19.5% at $26.37
The article Pinnacle to Acquire Ameristar Casinos for $869 Million originally appeared on Fool.com.
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