Rooneys owned track since 1972
MGM Resorts International last week closed on the $850 million purchase of Empire City Casino and Yonkers Raceway from the Rooney family, marking the exit of the Pittsburgh Steelers owners from the New York market after owning the track in Yonkers since 1972.
The acquisition deal was complete with the New York Gaming Commission approved the transfer of licenses for gaming and horse racing from the Rooneys to MGM.
“We are pleased to welcome the 1,200 employees at Empire City Casino to the MGM Resorts family,” Jim Murren, chairman and CEO of MGM Resorts, said in a statement. “Over the past three years, we have established a meaningful presence in the Northeast with Borgata in Atlantic City, MGM National Harbor in Maryland, and MGM Springfield in Western Massachusetts.”
The Yonkers racino—with 5,200 video gaming terminals—is only 15 miles from Times Square in Manhattan, MGM noted in the statement. “We have now gained a foothold in the high-density New York City region, and we look forward to leveraging the MGM platform to maximize value in this evolving marketplace.”
“What’s incredibly exciting is the amount of opportunity MGM Resorts will bring to the employees at Empire City, as well as Westchester County, the city of Yonkers, and the State of New York,” Timothy J. Rooney, president and CEO of Empire City Casino, said in a statement.
“With destinations throughout the world, from resorts to casinos to entertainment, MGM has a tried-and-true formula for success.”
Rooney added that MGM knows “how to build and grow properties that continually raise the bar in entertainment, travel, and leisure, and we are so thrilled to leave Empire City in MGM’s capable hands.
“The potential for growth at Empire City has absolutely no boundaries. MGM will truly provide Empire City employees and the property’s guests with the resources and opportunities to make the casino and track into something we haven’t even yet realized. I cannot wait to see what’s to come.”
The Yonkers facility will be owned by MGM Growth Properties, the real estate investment trust created by MGM Resorts, which manage the property on a lease the property from MGP.
MGM funded the acquisition with $360 million in cash and 9.372 million shares while taking on $246 million in debt. MGP then took that debt, which was repaid with funds under its credit facility, and issued 13 million operating partnership units to MGM. MGP also received first right of refusal on certain undeveloped land adjacent to Empire City.
MGM will pay an additional $50 million if Empire City gets a table games license before 2023 and accepts the license before 2025.
Bank of America Merrill Lynch was MGM’s exclusive financial adviser. PJT Partners was financial advisor to the conflicts committee for MGP, which has increased its stock sale to 17 million shares at $29.25 each with another 2.550 million available to underwriters.
Net proceeds including overallotment would be $548.3 million on the offering, with proceeds to repay revolver draws for previous acquisitions as well as the Empire City acquisition and pay for improvements at Park MGM and NoMad in Las Vegas.
