Twin River Worldwide Holdings, Inc. announced that it has entered into an agreement to acquire the Tropicana Evansville casino operations from Caesars Entertainment, Inc. for $140 million. As a result of the transaction structure, Twin River will reportedly make the acquisition without any cash outlay.

As part of the acquisition, Gaming and Leisure Properties, Inc., a publicly traded gaming-focused real estate investment trust (REIT), will acquire the Evansville casino real estate for $340 million and lease it back to Twin River for $28 million/year in rent, subject to escalation. As a result, Twin River will acquire the Evansville facility, which had $32 million in 2019 EBITDA (after $28 million pro forma for the lease), at a multiple of 4.4x 2019 rent-adjusted EBITDA. As part of the transaction, GLPI will acquire the real estate at Twin River's Dover, Delaware facility for $144 million and lease it back to Twin River for $12 million/year in rent, subject to escalation.

Twin River will also acquire unencumbered rights to the sports betting and iGaming skins associated with the Evansville operations to access the growing Indiana market as part of the transaction.

"This transaction is consistent with our core strategy of acquiring strategic gaming assets at attractive valuations and, importantly, represents the company's entry into a 10th state. It also provides us with access to an attractive Indiana gaming market, in which we will look to significantly advance our mobile and online sports betting and iGaming initiatives," said George Papanier, president and CEO. "We believe this property is a great fit for our portfolio. We are acquiring the operations at a value accretive multiple, while also enhancing our interactive offerings."

The total consideration for the transaction represents an implied proforma purchase multiple of 4.4x earnings before interest, taxes, depreciation and amortization ("Evansville's 2019 EBITDA") for the period ended December 31, 2019, after accounting for the $28 million in expected annual rent payments to GLPI with respect to the Evansville property. The multiple excludes the impact of any potential cost synergies or possible revenue enhancement opportunities from operational improvements. Based on Evansville's 2019 EBITDA, the acquisition is expected to be immediately accretive to Twin River's earnings and EBITDA.

Tropicana Evansville has 79,000 square feet of enclosed space, including 45,000 square feet of casino floor, four dining venues, a race and sportsbook and back of house space. The complex also includes 11,000 square feet of convention space adjacent to the casino, and a Riverfront Event Center located across the street, which includes 10,000 square feet of convention space overlooking the Ohio River.

After acquisition of this property and taking into consideration four additional properties currently under contract, Twin River will operate 15 properties in ten states.

The transaction is expected to close in mid-2021, subject to receipt of required regulatory approvals and other customary closing conditions.