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Acquisitions
 9 Months Ended
Sep. 30, 2017
Acquisitions  
Acquisitions

 

5. Acquisitions

 

1st Jackpot and Resorts

 

On May 1, 2017, the Company acquired RIH Acquisitions MS I, LLC and RIH Acquisitions MS II, LLC, the holding companies for the gaming operations of 1st Jackpot and Resorts, in Tunica, Mississippi, for total cash consideration of $47.0 million. The Company is operating both of these casino properties and it leases the underlying real estate associated with these two businesses from GLPI with a total initial annual payment of $9.0 million subject to the provisions included in the terms of the Master Lease.  The underlying real estate leased from GLPI has been accounted for as a financing obligation, which is included in the total consideration for the transaction and has increased the Company’s Master Lease financing obligation by $82.6 million, which represents the purchase price GLPI paid for the underlying real estate assets.

 

The preliminary purchase price allocation has resulted in $35.5 million of goodwill which is deductible for tax purposes.  Property and equipment under the Master Lease is comprised of buildings and improvements and land rights that are amortized on a straight-line basis over thirty-one years.  This time period represents the remaining life of the Master Lease with GLPI, including renewal options that are reasonably assured of being exercised.  Additionally, prior to the acquisition date, the Company incurred transaction costs of $0.2 million and $0.9 million, which were reported in general and administrative expenses for the three and nine months ended September 30, 2017, respectively.  This acquisition was not material to the Company’s consolidated financial statements.

 

 

 

 

 

 

May 1, 2017

 

 

 

Cash

 

$ 6,725

Other current assets

 

2,735

Property and equipment - non-master lease

 

8,368

Property and equipment - master lease

 

82,603

Goodwill

 

35,534

Other intangible assets

 

851

Total Assets

 

$ 136,816

 

 

 

Current portion of financing obligation

 

$ 1,968

Accrued expenses

 

2,536

Accrued salaries and wages

 

3,256

Other current liabilities

 

1,448

Long-term financing obligation

 

80,635

Total liabilities

 

$ 89,843

Cash paid

 

46,973

Total consideration transferred

 

$ 136,816