Penn National to buy Zia Park

Penn National Gaming has entered into an agreement to purchase Zia Park and its slots casino in Hobbs, N.M., for $200 million, Penn National announced late Tuesday. The deal is subject to regulatory approvals, and is expected to close in mid-2007.

Zia is located in rural southeastern New Mexico. It became the states fifth racetrack when it opened for its inaugural season of racing in September 2005, and is currently conducting a mixed meet for Thoroughbreds and Quarter Horses.

A racino, Zia has 746 slot machines in place, as well as a one-mile racing oval and stable area of more than 1,500 stalls, all situated on about 320 acres. It was built at a cost of $45 to $50 million, and its majority owner is R.D. Hubbard, the former owner of Hollywood Park.

Penn National owns 16 racing and/or gaming facilities throughout North America, including Penn National Race Course in Pennsylvania and Charles Town Races in West Virginia.

Were excited to be adding Zia Park to our diverse portfolio of successful racing and gaming properties, and to be entering a market where the state has worked collectively with racing and gaming to create a favorable environment, Peter M. Carlino, chief executive officer of Penn Gaming, said in a release. Zia Park is an attractively valued acquisition that is just two years old and does not require significant capital expenditures.

The facilitys success in attracting patrons from west Texas has driven revenue growth during its first two years of operations. We look forward to completing this transaction and welcoming Zia Park employees to Penn National.

According to the release, in the 12-month period that ended Sept. 30, 2006, Zia reported its operations generated approximately $69.7 million in revenue, and approximately $24.5 million in EBITDA, or earnings before interest, taxes, depreciation and amortization.