MGM increases East Coast presence with Yonkers purchase

MGM increases East Coast presence with Yonkers purchase

Thursday, May 31, 2018 Posted by Michael Lawson
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The deal was completed for a cool $850 million.

MGM Resorts has made inroads into the New York market, with the purchase of the Empire City Casino and Yonkers Raceway for $850 million.

The global giant already has a significant East Coast presence with the Borgata in Atlantic City and MGM National Harbor in Maryland. The firm is also building the MGM Springfield in Massachusetts, which is scheduled for an August launch.

"We are excited to announce the addition of Empire City to the MGM Resorts portfolio," said Jim Murren, Chairman and CEO of MGM Resorts International. "This acquisition represents an excellent opportunity to further solidify our presence on the East Coast, and in particular, expand our reach into the high-density New York City region. We believe this transaction enhances our free cash flow profile and presents attractive future opportunities for the Company, and we look forward to welcoming the Empire City team and guests to the MGM Resorts family."

"With Empire City's approximately 40% share of gross gaming revenues in the market, we believe there are significant opportunities for MGM Resorts to further drive growth," said Dan D'Arrigo, Executive Vice President and Chief Financial Officer of MGM Resorts International. "We believe the transaction will be value-accretive within its first year of closing, with incremental revenue synergies expected to support growth in 2020 and beyond."

D'Arrigo added: "Following the sale of the developed real property to MGP, the net purchase price to MGM Resorts of approximately $225 million represents a multiple of less than 6 times Adjusted EBITDA, inclusive of expected operational synergies and identified revenue growth opportunities."

Totally Gaming says: The state of New York has a GDP to rival some of the world’s wealthiest nations, so acquiring a high-profile casino and racecourse in the Yonkers area of the state ought to be a relatively safe bet. A company with the  experience, knowhow and resources of MGM Resorts should have no issues with regards to making this a highly lucrative arrangement.

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