CONTACT:
Robert Ippolito Joseph N. Jaffoni
Chief Financial Officer Jaffoni & Collins Incorporated
610/373-2400 212/835-8500 or [email protected]
FOR IMMEDIATE RELEASE
PENN NATIONAL GAMING TO ACQUIRE CRC HOLDINGS AND
LOUISIANA CASINO CRUISES FOR $160 MILLION
- Accretive Transaction Expands Penn National's Gaming Assets,
Further Diversifies Operations Into Louisiana and Canada -
Wyomissing, Penn. and Miami, Florida, (July 31, 2000) -- Penn National Gaming,
Inc. (NASDAQ: PENN) announced today that it has entered into a definitive
agreement to acquire CRC Holdings, Inc. (CRC) which does business as Carnival
Resorts and Casinos for $95.8 million and the assumption of approximately $32
million in net debt. CRC is an experienced operator of gaming facilities and the
owner of approximately 59% of Louisiana Casino Cruises, Inc. (LCCI). Penn
National also announced that it had entered into a definitive agreement with the
minority owners of LCCI to acquire their approximately 41% stake for $32.5
million. Under the terms of the agreement, CRC will divest all of its non-gaming
related assets prior to closing. The acquisitions are expected to be accretive
to Penn National's results in the first year of operations after closing. In the
twelve months ended February 29, 2000 CRC's gaming business, including LCCI,
generated approximately $30.6 million in EBITDA.
Casino Rouge
LCCI owns and operates the Casino Rouge, a riverboat gaming facility on the east
bank of the Mississippi River in Baton Rouge, Louisiana. The Casino Rouge
features a four-story, 47,000 square foot riverboat casino replicating a 19th
century Mississippi River paddlewheel steamboat, a two-story, 58,000 square foot
dockside embarkation facility and parking for 1,650 cars. The riverboat has a
capacity of 1,800 patrons and emphasizes spaciousness and excitement with its
generous aisle space, 15-foot ceilings, a large central atrium and specially
designed lighting. The Casino Rouge offers 28,000 square feet of gaming space
spread over three decks with 974 gaming machines and 42 table games. The
dockside embarkation facility offers a panoramic view of the Mississippi River
and a variety of amenities including a 268-seat buffet, bar and lounge areas,
meeting and planning space and a gift shop. The Casino Rouge cruises eight times
a day. Located on a 23-acre site, five acres of which are owned by LCCI, the
Casino Rouge is within approximately one mile of both Interstate 10 and
Interstate 110. For the year ended November 30, 1999 the Casino Rouge had a
61.9% share of the Baton Rouge gaming market casino revenues, as reported by the
Louisiana State Police, a regulatory body governing the market.
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Casino Rama
CRC also has a management contract for Casino Rama which is in effect until
2011. Casino Rama is located approximately 80 miles north of Toronto, Canada, in
Orillia, Canada on the Chippewas of Mnjikaning First Nation land. Casino Rama,
with 75,000 square feet of gaming space, features 2,300 slot machines and 110
table games as well as a buffet, two restaurants, a nightclub, a retail center
and a 3,000 seat outdoor theater. The Casino Rama facility is currently
undergoing a U.S. $160 million expansion.
Commenting on the agreements, Peter M. Carlino, Chief Executive Officer of Penn
National, said, "This is an excellent financial and strategic transaction for
Penn National as it is expected to be accretive to our operating results upon
closing, it builds the critical mass of our gaming operations when combined with
our soon-to-be completed acquisition of the Casino Magic hotel and casino and
the Boomtown Biloxi casino and our Charles Town gaming facility and diversifies
the geographic reach of our operations. Furthermore, the transaction brings to
Penn National a management team with a tremendous track record in the gaming
industry.
"The Casino Rouge is the premier riverboat gaming facility in Baton Rouge,
Louisiana as evidenced by its exceptional market share and operating results.
And, with a relatively consistent number of gaming devices and table games since
opening in 1996, Casino Rama has built its revenues to approximately U.S. $354
million in 1999. Casino Rama's daily win per position at U.S. $320 in 1999 ranks
among the highest of casinos in the U.S. and Canada which we believe underscores
the gaming expertise of the CRC management team which has managed the property
since its opening in 1996 and assisted in the property's development." The
transaction, expected to close in the first half of 2001, is subject to
regulatory and other approvals in both Louisiana and Canada, financing, the
expiration of the applicable Hart-Scott-Rodino waiting period and other
customary closing conditions. Penn National was advised in its negotiations with
CRC by the Fort Hill Group of New York, NY.
Penn National owns three racetracks and eleven off-track wagering (OTW)
facilities located in Pennsylvania (two tracks and eleven OTWs) and West
Virginia (one track). The Company's Charles Town Races in West Virginia also
features 1,500 slot machines. Penn National intends (subject to certain
conditions) to acquire the Casino Magic hotel, casino, golf resort and marina in
Bay St. Louis, Mississippi and the Boomtown Biloxi casino in Biloxi, Mississippi
from Pinnacle Entertainment, Inc. (NYSE: PNK).
Except for the historical information in this press release, this press release
includes forward-looking statements which are made pursuant to the Private
Securities Litigation Reform Act of 1995 that involve risks and uncertainties,
including, but not limited to, quarterly fluctuations in results, the management
of growth, weather, regulatory changes, and other risks detailed from time to
time in the Penn National's Securities and Exchange Commission filings. Actual
results may differ materially from such information set forth herein.
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