MGM Growth Properties LLC ("MGP") completed the acquisition of developed real property associated with Empire City from MGM Resorts International.
MGM Growth Properties announced that it has commenced an underwritten public offering of 14.5 million Class A shares and intends to grant the underwriters a 30-day overallotment option to purchase up to an additional 2.18 million shares. MGM Growth Properties intends to use the proceeds to fund the acquisition. MGM Growth Properties will lease back the acquired developed real property associated with Empire City to a subsidiary of MGM Resorts International. MGP expects to fund the acquisition of the Empire City real property and the assumption of related debt with a combination of existing cash on hand, borrowings under its senior secured revolving credit facility, and the aforementioned issuance of operating partnership units to a subsidiary of MGM Resorts.
The purchase price represents a cap rate of 8.0%, or a 12.5x EBITDA multiple. The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in the first quarter of 2019. As of January 28, 2019, the transaction has been received approval from the Ney York State Gaming Commission. The transaction is expected to close on or about January 29, 2019. BofA Merrill Lynch is acting as exclusive financial advisor to MGM Resorts in connection with the transaction. PJT Partners, LP is acting as financial advisor to the conflicts committee of the MGP Board of Directors. Lauren Boglivi of Proskauer Rose LLP acted as legal advisor to MGM Resorts International.
MGM Growth Properties LLC (NYSE:MGP) ("MGP") completed the acquisition of developed real property associated with Empire City from MGM Resorts International (NYSE:MGM) on January 29, 2019. MGP funded the acquisition of the developed real property from MGM Resorts through the assumption of approximately $246 million of indebtedness.