MGM Growth Properties LLC (NYSE:MGP) ("MGP") entered into an agreement to acquire developed real property associated with Empire City from MGM Resorts International (NYSE:MGM) for approximately $630 million on May 28, 2018. MGM Growth Properties LLC will issue 12.9 million shares and assume approximately $245 million of debt. In a related transaction, MGM Resorts International entered into an agreement to acquire real property and operations of Empire City Casino at Yonkers Raceway for approximately $900 million including the refinancing of Empire City's outstanding debt, which is expected to be approximately $245 million at the time of closing. As part of consideration by MGM Growth Properties for the acquisition of developed real property associated with Empire City from MGM Resorts International, MGM Growth Properties agreed to the assumption of the approximately $245 million of debt refinanced by MGM Resorts in the above mentioned related transaction and the balance through the issuance of operating partnership units to MGM Resorts. As of January 28, 2019, MGM Growth Properties issue 12.9 million operating units to MGM to fund a portion of the transaction of $379.1 million, along with the difference between purchase price and MGM's carrying amounts of the net assets purchased in connection with the Empire City transaction of $11.9 million.

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.