Ohio’s top-grossing casino is set to change hands. In a deal worth $1.06 billion, the Hard Rock Rocksino Northfield Park is set to change hands from Milstein Entertainment LLC to MGM Growth Properties LLC.
The membership interest purchase agreement will be for all of the issued and outstanding limited liability company interests in Northfield Park Associates LLC, which is owned by Milstein.
The purchase will be funded with a combination of cash on hand and debt. MGP expects to ultimately sell the entities holding the licenses and operating assets to a third-party operator while retaining ownership of the real estate, anticipating $50 to $60 million of annual rent, which is expected to represent approximately 1.8x rent coverage.
"MGP is proud to announce the acquisition of the Hard Rock Rocksino, the best-performing gaming asset in Ohio," said James Stewart, CEO of MGM Growth Properties. “We are thrilled to join the Northeast Ohio community and look forward to continuing to work with the management team to consummate the transaction and identify a third-party tenant to operate the asset going forward. This attractive addition to our portfolio is expected to result in mid to high single digit percentage accretion to AFFO per share, demonstrating again our commitment to generating value for our shareholders."
The transaction is expected to close in the second half of 2018, subject to customary closing conditions and regulatory approvals.
The Rocksino reported gaming revenue of $232.5 million last year, compared with $201.5 million for the downtown Jack Cleveland Casino.
The facility sits on 110 acres, consists of a 200,000-square-foot gaming facility with over 2,300 video lottery terminals, a variety of retail and food and beverage outlets, as well as entertainment venues, including a 1,900-seat music venue and a 250-seat event space. It also includes a year-round horse racetrack, and a gas station and car wash.