VICI Properties acquires MGM Growth Properties for $17.2bn
Deal creates America’s largest owner of experiential real estate with an enterprise value of approximately $45bn.
VICI Properties and MGM Growth Properties (MGP), parent company of MGM Resorts, today announced that the two companies have entered into a definitive agreement which will see VICI acquire MGP for a total sum of $17.2bn. This sum includes the assumption of around $5.7bn in debt.
The deal will place VICI’s estimated enterprise value at $45bn, making it the largest experiential net lease real estate company in the United States.
In regards to MGM Resorts and its portfolio of land-based casinos, VICI will enter into an amended and restated triple-net lease with the company. The lease will have an initial total annual rent of $860m and an initial term of 25 years, with three 10-year tenant renewal options. Rent under this agreement will increase by 2% per-year.
“Through this transformative strategic acquisition, we are merging MGP’s best-in-class portfolio into VICI’s best-in-class management and governance platform, creating the premier gaming, entertainment and leisure REIT in America,” said Ed Pitoniak, CEO of VICI Properties.
“We want to thank James Stewart, Andy Chien and the MGP Board for building and stewarding a portfolio of such exceptional quality, and going forward we are honored to become a key real estate and capital partner for Bill Hornbuckle and the MGM Resorts management team and Board. We look forward to supporting their strategic growth objectives for decades to come.”
VICI hopes the agreement will diversify the company’s tenant base and enhance its portfolio quality, size, and scale at significant discount to replacement cost.
“After many years of growing both of our portfolios, combining them into one company will generate the best results for the shareholders of both companies,” added James Stewart, CEO of MGP. “The combined company will create a superior platform for delivering exceptional returns to MGP’s existing shareholders, by improving diversification, increasing scale, lowering cost of capital and benefiting from future growth.”
Bill Hornbuckle, CEO and president of MGM Resorts, stated: “This transaction unlocks the significant real estate value of our assets, enhances our financial flexibility and strengthens our ability to execute key growth initiatives. We look forward to our long-term partnership with VICI.”
The acquisition was financed by a $9.3bn financing commitment from Morgan Stanley, J.P. Morgan and Citibank.
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