MGM Resorts International (NYSE: MGM) has signed an agreement with Blackstone Inc (NYSE: BX) to acquire the operations of The Cosmopolitan of Las Vegas for cash consideration of $1.625 billion, subject to customary working capital adjustments.
The Cosmopolitan is a luxury resort and casino on the Las Vegas Strip. Blackstone acquired The Cosmopolitan in 2014.
The purchase price represents a multiple of about eight times adjusted EBITDA, including expected operational synergies and identified revenue growth opportunities.
After the deal close, MGM Resorts will enter into a 30-year lease agreement, with three 10-year renewal options, with a partnership among Stonepeak Partners, Cherng Family Trust, and Blackstone Real Estate Income Trust Inc (BREIT), which will acquire The Cosmopolitan's real estate assets.
MGM Resorts will pay an initial annual rent of $200 million, escalating annually at 2% for the first 15 years.
The transaction is expected to close in the first half of 2022.
MGM Resorts held $5.6 billion in cash and equivalents as of June 30, 2021.
Price Action: MGM shares are trading higher by 1.58% at $45.32 on the last check Monday.
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