Eldorado Resorts is to purchase hotel and casino operator Tropicana Entertainment for approximately $1.85bn, seeing the firm acquire the operating assets of seven casinos in six states.

The agreement sees Gaming and Leisure Properties (GLPI) pay $1.21bn, excluding taxes and expenses, for substantially all of Tropicana’s real estate, and enter into a master lease with Eldorado, who will fund $640m in cash, for the acquired real estate.

GLPI is expected to acquire all real estate associated with the Tropicana portfolio, except the MontBleu Casino Resort & Spa in South Lake Tahoe and the Tropicana Aruba Resort and Casino, the latter of which Tropicana intends to dispose of prior to closing.

Following the acquisition of the real estate portfolio by GLPI, Eldorado will enter into a triple net master lease for the acquired properties with an initial term of 15 years, with renewals of up to 20 years at the Eldorado’s option. The initial annual rent under the terms of the lease is expected to be approximately $110 million.

Tony Rodio, president and CEO of Tropicana, stated: “I am incredibly proud of what the entire Tropicana team has been able to accomplish over the past 8 years, taking Tropicana from bankruptcy to one of the industry’s true success stories.”

Amongst the casinos the firm is to acquire operating asset of includes two in Nevada – the Tropicana Laughlin Hotel and Casino and the MontBleu Casino Resort & Spa in South Lake Tahoe – as well as casinos in Indiana (Tropicana Evansville), Louisiana (Belle of Baton Rouge Casino & Hotel), Mississippi (Trop Casino Greenville), Missouri (Lumière Place) and New Jersey (Tropicana Casino and Resort, Atlantic City).

“Eldorado Resorts is yet again pursuing a large transaction that is expected to be accretive”

These properties include approximately 7,900 slot machines, 265 table games and in the region of 5,400 hotel rooms along with a number of dining, retail and entertainment amenities.

Upon completion of all pending transactions, Eldorado’s expanded property portfolio will feature approximately 26,800 slot machines and VLTs, more than 800 table games and over 12,500 hotel rooms.

Gary Carano, chairman and chief executive officer of Eldorado, commented: “With our proposed acquisition of Tropicana Entertainment, Eldorado Resorts is yet again pursuing a large transaction that is expected to be accretive, further increase the scale of our regional gaming platform and drive free cash flow growth.

“Our recent initiatives to enhance shareholder value, including the Tropicana transaction and our agreement to divest two properties, reflect significant milestones in the successful ongoing execution of our long-term strategy to opportunistically expand our 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.”

“Ultimately, we believe that the addition of the highly complementary Tropicana Entertainment assets to the Eldorado Resorts family of properties will result in attractive near and long-term growth for Eldorado and another opportunity to create new value for shareholders,” added Carano.