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Meadows being bought for $440M

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The Meadows Racetrack & Casino, a major driver in the transformation of the Racetrack Road area over the past eight years, was purchased by an eastern Pennsylvania gaming company for $440 million.

Wyomissing-based Gaming and Leisure Properties, Inc. said in a news release Wednesday it entered into an amended agreement to acquire the North Strabane Township gaming and entertainment venue from Las Vegas-based Cannery Casino Resorts, LLC,

The casino was originally opened by CCR in a temporary building it constructed at the edge of the main parking lot of the former Meadows Racetrack in 2007. CCR purchased The Meadows in 2004 from Magna Entertainment Corp. for $200 million.

Today, operating out of a 180,000-square-foot facility it built and opened in 2009 – one of the largest gaming facilities on the East Coast – the casino contains 3,172 slot machines, 74 table games and 14 poker tables.

In addition to the casino, the property includes 11 casual and fine dining restaurants, bars and lounges, a 24-lane bowling alley and a 5/8 mile racetrack with a 500-seat grandstand.

In the eight years since it began operations, The Meadows grew to employ about 1,400 people, making it one of the largest employers in Washington County. The Meadows recently announced the start of construction of an outdoor events center for staging boxing and other events, the latest addition to its entertainment assets.

The casino’s growing presence, along with the opening of Tanger Outlets in 2008, pushed the development of the hospitality industry along Racetrack Road, where more than 1,000 rooms were built over the past several years.

Earlier this year, a 154-room Hyatt Place hotel opened adjacent to the casino.

GLPI said Wednesday it is actively engaged in a search for a third-party operator for The Meadows property, to which it expects to sell the entities holding the licenses and operating assets, while retaining ownership of the land and buildings.

The purchase requires approval from Pennsylvania Gaming Control Board and Pennsylvania Harness Racing Commission, and is expected to close in the second half of 2016.

Wednesday’s announcement completes a deal announced by the two companies in May 2014.

GLPI said the $440 million purchase price includes $10 million it previously paid and is subject to certain adjustments, which it said includes a settlement of all claims between GLPI and Cannery.

The adjustments are a result of a lawsuit filed by GLPI in October 2014 against CCR, alleging fraud, breach of the purchase agreement and breach of a related consulting agreement.

“We are pleased to resolve the Cannery litigation in a manner that we believe is positive for both companies,” said Peter M. Carlino, chairman and chief executive officer of GLPI. “The amended agreement allows us to add The Meadows to our growing portfolio of high quality regional gaming assets at a price that is reflective of current property performance.

The property has enjoyed improving performance in the second half of 2015 and we look forward to partnering with one of the many quality operators in the gaming industry to continue that momentum.”

William Paulos, co-chief executive officer of Cannery Casino Resorts, said, “This resolution is a good outcome for CCR shareholders. All of the net sale proceeds will be used to reduce our debt and better position us for the future. We are now focused on working with GLPI to ensure a smooth transition for our team members and customers.”

GLPI formed in November 2013 as a spinoff from Penn National Gaming. The company, which is publicly traded on the NASDAQ stock exchange, operates as a real estate investment trust focused on gaming properties. It owns 21 casinos in a dozen states, of which 19 are leased to Penn National Gaming.

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