MGM Resorts closes purchase of Infinity World’s CityCentre stake
MGM Resorts International completed the previously announced acquisition of Infinity World Development Corpthe 50 percent stake in CityCenter Holdings for $ 2.125 billion.
The transaction, which was first detailed on July 1, 2021, represents an implied valuation of $ 5.8 billion based on net debt of $ 1.5 billion, after giving effect to a sale prior to a two-acre parcel of land.
The strip where CityCenter is located is also home to Aria Resort & Casino and Hotel and Spa Vdara, on which the company plans to monetize.
Concurrent with the closing of the purchase, MGM Resorts and Blackstone also entered into the sale-leaseback agreement for the latter to acquire the real estate assets of Aria Resort & Casino and Vdara Hotel and Spa for 3.89 billions of dollars.
MGM Resorts subsequently leased the property to black stone and continues to manage, operate and be responsible for all aspects of the property on a day-to-day basis.
As part of the closing of the transactions, the company fully repaid CityCenter’s debt. As of June 30, 2021, CityCenter had cash and cash equivalents of $ 307 million and total debt of $ 1.73 billion.
Bill Hornbuckle, CEO and President of MGM Resorts, previously said of the purchase: “CityCenter has consistently enhanced the Las Vegas experience over the years, contributing to this vibrant city’s undeniable position as a premier tourism and business destination.
“Uniting all of CityCenter under the MGM Resorts corporate structure and strategy will allow us to consolidate financial results, leverage efforts to strengthen our operating model and customer experience, and to pursue our vision of becoming the world’s premier gaming entertainment company. “
Earlier this week, MGM Resorts reached a definitive deal with Blackstone to acquire the operations of The Cosmopolitan of Las Vegas for a cash consideration of $ 1.625 billion, subject to customary working capital adjustments.
Following the closing of the transaction, MGM entered into a 30-year lease, with three 10-year renewal options, with a partnership between Stonepeak Partners, Cherng Family Trust and Blackstone Real Estate Income Trust, acquiring the real estate assets.
MGM will pay an initial annual rent of $ 200 million, increasing each year by 2% for the first 15 years and the greater of 2% or CPI increase (capped at 3%) thereafter.