Penn National Gaming has provided a further update on its acquisition of Pinnacle Entertainment, which it hopes to finalise in H2 of this year, as the firm reveals its first quarter figures have exceeded guidance expectations.
The proposed $2.8bn purchase will increase the firm’s operational scale and geographic diversity, to a combined 41 properties in 20 jurisdictions, including 15 of the top 30 metropolitan statistical areas in America.
Timothy J. Wilmott, chief executive officer of Penn National, stated: “On March 29, shareholders of both Penn National and Pinnacle Entertainment Inc overwhelmingly approved our proposed merger, with over 99% of all votes cast in favour of the transaction.
“Additionally, we have secured regulatory approvals, subject to customary conditions, from Pennsylvania (both the Gaming Control Board and the Racing Commission), West Virginia and Illinois.
“This week and over the coming months we’ll be appearing before additional regulatory bodies to seek their approvals.
“Based on our progress to date, we remain confident of closing the transaction in the second half of this year.
“In the meantime, having visited all of the Pinnacle properties, as well as their Las Vegas Service Center on multiple occasions, we remain very impressed by their talented property and corporate teams and continue to make meaningful progress with our integration planning.
“As we’ve learned more about Pinnacle’s operations and processes, we are confident our $100 million of cost synergy objectives are well within reach.”
Net revenue for Penn National for Q1 of 2018 has been reported as $816.1m, a 5.1 percent increase on the previous years $776.2m, falling a fraction shy of its $817.3m guidance figure.
The company’s profit soared however, showing an 88.7 percent year-on-year increase from $5.1m to $45.4, with projections for the quarter hitting $38.6m.
Adjusted EBITDA for the period also exceeded both 2017’s figure ($227.4) and guidance figure for this year ($233.6m), with the actual Q1 2018 total reaching at $242.6m.
Wilmott added: “We are pleased to report that Penn National delivered a strong first quarter that exceeded our guidance.
“We are achieving significant benefits from our ongoing margin enhancement initiatives, which helped all three operating segments generate year over year adjusted EBITDA growth.
“In addition, more than half of our properties achieved year-over-year EBITDA growth and 65% of our gaming operations delivered adjusted EBITDA margin increases despite having to navigate difficult weather impacts during the quarter.”