The merger man: Sanfilippo drew on experience in deal for Ameristar

Pinnacle Entertainment CEO Anthony Sanfilippo drew upon his experience in corporate mergers in overseeing his company’s $2.8 billion acquisition of rival Ameristar Casinos in 2013.

In the six months since the buyout’s completion, Pinnacle has become a new company under its old name.

Las Vegas-based Pinnacle doubled its size. The company controls 14 casinos in nine states and is a regional gaming giant with more than $2.4 billion in annual revenue. Pinnacle operates 848,000 square feet of combined casino space with 511 table games and more than 21,000 slot machines. Pinnacle’s 13 hotels house 4,332 rooms.

The company also employs more than 15,000 people.

Pinnacle has three reporting regions — South, Midwest and West.

Although many states have reported weak gaming revenue figures in recent months, analysts view Pinnacle as one of the safe bets in the challenged regional gaming market.

Union Gaming Group analyst Robert Shore said in a January report to investors that Pinnacle’s operational expertise, free cash flow and cost savings of $26 million annually following the Ameristar merger give the company the tools to weather any economic turbulence.

“There is further opportunity for property- level margin improvement, systemwide revenue drivers and additional cost synergies,” Shore told investors. “The longer-term story is promising as the cost structure of regional assets has been streamlined and any future top-line gains will essentially translate directly into cash flow.”

Last week, Pinnacle exceeded market expectations when it announced a 77 percent increase in fourth-quarter revenues — its first full quarter including the Ameristar properties.

Macquarie Securities gaming analyst Chad Beynon said the market has “misvalued” Pinnacle.

“It remains our top pick in regional gaming,” Beynon said, citing a strong casino portfolio that outperformed the market.

Some of Pinnacle’s biggest changes from the merger came in Las Vegas. Pinnacle doesn’t operate a casino in its hometown, but it maintains a presence.

In January, the company took over a five-story, 86,000-square-foot office tower in The HC | Hughes Center on Paradise Road. Pinnacle will eventually employ 320 people in the corporate offices, paying more than $25 million in salary and benefits.

A tour of the offices finds both longtime Pinnacle employees and former Ameristar personnel sharing space.

For example, a corner office with spacious views to the south houses four marketing specialists. The workers transferred from Ameristar and are responsible for all of the combined company’s properties.

“Everyone works on the whole portfolio,” said Sanfilippo, who became Pinnacle’s CEO in March 2010. “There were some things we thought Ameristar did well. We outsourced our marketing functions but decided to bring everything in house.”

THE KEYS TO A SUCCESSFUL MERGER

Pinnacle has become a gaming industry case study in blending two different companies.

Sanfilippo said there were two keys to the integration. One was that the companies had similar corporate cultures. The other was communication. Ameristar allowed the Sanfilippo and his team to tour the eight properties they were buying and meet with employees multiple times.

He’s had experience integrating casinos after mergers. In 2003, Sanfilippo helped incorporate the three Horseshoe Gaming casinos into Harrah’s Entertainment following a $1.4 billion buyout. Two years later, Sanfilippo played a similar role in merging casinos into the company when Harrah’s bought Caesars Entertainment Inc. for $9 billion, the largest gaming industry merger in history.

During the Pinnacle-Ameristar merger, the buying company worked to mitigate the worries of skittish employees, who were involved in just the second major gaming buyout since the recession hit. Two years earlier, Boyd Gaming Corp. bought regional company Peninsula Gaming for $1.45 billion.

“We interviewed all employees and we selected the best individual who was the best fit in the new, larger company,” Sanfilippo said.

Pinnacle also decided to not eliminate the Ameristar name from casinos. Pinnacle already operates properties under different brand names — such as Boomtown, L’Auberge and Belterra.

“The Ameristar name has a loyal following,” Sanfilippo said. “We’re not rebranding any properties because we saw no reason to change the names.”

By April, Pinnacle plans to announce a new player loyalty program and rewards card that ties all 14 casinos together.

To satisfy Federal Trade Commission concerns, Pinnacle had to sell two assets in markets where the company could be viewed as holding a monopoly. The under-construction Ameristar casino in Lake Charles, La., was sold to Golden Nugget while Tropicana Entertainment bought Pinnacle’s Lumiere Place in St. Louis.

Shortly after Jan. 1, Pinnacle unveiled a new corporate logo to its employees to give the company a fresh start following the merger.

“We’re very happy with the corporate culture that we’ve been creating,” Sanfilippo said.

FOCUSED ON EXPANSION

The new corporate headquarters are a work in progress. Walls and public areas still need decorating. And the company is filling several positions left vacant by the buyout.

But don’t call it a corporate headquarters.

Sanfilippo has christened the location the company’s “Las Vegas service center,” providing all the necessary backup support to casinos throughout the company.

“Publicly, we have been treating Pinnacle like a new company,” Sanfilippo said.

Pinnacle encourages its casinos to participate in their local communities and get involved in charitable efforts. The same holds true for the corporate offices. Sanfilippo said Pinnacle plans to work with the Cleveland Clinic Lou Ruvo Center for Brain Health as a charitable partner.

With the merger complete, Pinnacle is focused on completing its two expansion projects.

In May, Pinnacle will open the newly christened Belterra Park Gaming and Race Track near Cincinnati. Construction is adding a 1,500-machine video lottery terminal casino with six restaurants to the thoroughbred horse-racing facility.

In July, Pinnacle is opening a 150-room hotel and conference space at Boomtown New Orleans.

As for “What’s next?” Sanfilippo isn’t tipping his hand.

“We have enough here to keep us busy,” he said.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Follow @howardstutz on Twitter.

ad-high_impact_4
Business
Small businesses struggle to find qualified candidates
A 2018 survey found that over two-thirds of small businesses in Nevada find it somewhat to very difficult to recruit qualified candidates. Bailey Schulz/Las Vegas Review-Journal
Nevada secretary of state website offers little protection against fraudulent business filings
Property developer Andy Pham tells how control of his business was easily seized by another person using the secretary of state website.
Caesars may be going solo in its marijuana policy
Several Southern Nevada casino companies aren’t following Caesars Entertainment’s lead on marijuana testing.
How much is the Lucky Dragon worth?
Less than a year-and-a-half after it opened, the Lucky Dragon was in bankruptcy.
Gyms and discount stores take over empty retail spaces
Grocery stores used to draw people to shopping centers. But many large retail spaces have been vacant since 2008. Discount stores like goodwill and gyms like EOS Fitness are filling those empty spaces, and helping to draw shoppers back in. K.M. Cannon/Las Vegas Review-Journal
Funding source of Las Vegas stadium for the Raiders is sound, expert says
The stadium is funded in part by $750 million of room taxes, the biggest such tax subsidy ever for a professional sports stadium. Robert Lang, executive director of Brookings Mountain West and The Lincy Institute at UNLV, says that is a good use of public funds. (Richard Velotta/Las Vegas Review-Journal)
Las Vegas needs light rail, expert says
Robert Lang, executive director of Brookings Mountain West and the Lincy Institute said he is afraid of a "congestion mobility crisis." Las Vegas needs a light rail system, he said, to accommodate the city's growing number of attractions. (Richard Velotta/Las Vegas Review-Journal)
Three takeaways from Wynn Resorts' Earnings Call
Matt Maddox came out swinging in his first earnings conference call as Wynn Resorts chief executive officer, boasting of record Las Vegas quarterly revenues and applicants lining up for work.
Star Wars VR Comes to Las Vegas
Sneak peak at the new "Star Wars: Secrets of the Empire" VR experience at the Grand Canal Shoppes.
Elaine Wynn continues her fight to change Wynn Resorts board
Elaine Wynn, the largest shareholder of Wynn Resorts Ltd., is seeking to kick a friend of her ex-husband Steve Wynn off the company’s board of directors. (Todd Prince/Las Vegas Review-Journal)
Zillow is getting into house flipping in Las Vegas
Las Vegas Review-Journal real estate reporter Eli Segall says flipping houses has waned in popularity after the housing bubble burst.
Ellis Island Buys Mt. Charleston Lodge
Ellis Island, which operates a casino, brewery and hotel just off the Strip, purchased the Mt. Charleston Lodge in early April.
Casinos to be penalized for allowing drug-impaired customers to gamble
Nevada Gaming Commission Chairman Tony Alamo talks about an amendment making casinos subject to the same disciplinary standards of preventing people to gamble if impaired by drugs as they are for letting them play while intoxicated by alcohol.
Terrible Herbst to open large travel center in Southern Nevada
The 50,000-square-foot commercial travel center will include 96 fuel pumps and the third White Castle restaurant in Southern Nevada. Wade Tyler Millward reports.
Art Bell’s Top 10 Shows
A selection of radio host Art Bell’s most popular shows.
Hooters owner talks about room upgrades at his hotel-casino
George Ruff, founder and senior principal of Trinity Hotel Investors L.L.C., owner of Hooters Hotel and Casino in Las Vegas, talks about recent room upgrades at the hotel. K.M. Cannon/Las Vegas Review-Journal
Passengers Discuss Allegiant Air
Allegiant Air passengers voice their views on the airline at McCarran International Airport on April 16, 2018. (Bailey Schulz/Las Vegas Review-Journal)
Longtime Las Vegas attorney John Momot dies at age 74
Criminal defense attorney John Momot, who represented mob figures and even played himself in the movie “Casino,” has died.
Trump Slams Amazon for Not Paying Enough in Taxes
Trump Slams Amazon for Not Paying Enough in Taxes Trump tweeted his concerns about the company on Thursday. This isn't the first time Trump commented on the issues via Twitter. August 2017 December 2017 Amazon did hold back on paying state taxes in 1995, but the company has been routinely collecting state sales taxes since then. In 2016, the company's report from the Securities and Exchange Commission confirmed it paid $412 million in taxes.
David Copperfield in court after man injured during magic trick
The attorney for a British man who is suing illusionist David Copperfield said his client suffered serious injuries after being called on stage during Copperfield's show at MGM Grand.
eyecandylab CEO shows augmented reality during NAB
Robin Sho Moser, CEO and co-founder of eyecandylab gives an augmented reality demonstration at his booth during the National Association of Broadcaster Show at the Las Vegas Convention Center. K.M. Cannon/Las Vegas Review-Journal
Trends in access to capital for local black business owners
Denette Braud, owner of Braud’s Funnel Cake Cafe, talks about what owning her own business means to her.
Sir Richard Branson announces purchase of Hard Rock Hotel
Sir Richard Branson, founder of the Virgin Group, has acquired the Hard Rock Hotel with partners and plans to turn it into a Virgin-branded property by the end of 2019.
Calvary Christian Learning Academy, “There was no fair warning.”
Samantha O’Brien, whose three-year-old daughter attended the Calvary Christian Learning Academy daycare, found out Monday night when her daughter’s teacher called about the school closing.
Adobe unveils #HackTheBracket application for March Madness
Adobe unveiled their #HackTheBracket application at the Adobe Summit trade show at Sands Expo. People can use data from Adobe Analytics to make their bracket for March Madness. K.M. Cannon/Las Vegas Review-Journal
Adidas Signs Yankees' Star Aaron Judge
Adidas Signs New York Yankees Star Aaron Judge The slugger is set to don a new set of stripes this season after signing with the apparel company. Aaron Judge Terms of the deal were not disclosed. The deal includes branding on his batting gloves and wristbands. Judge, the AL's reigning Rookie of the Year, was previously under contract with Under Armour since 2014. Judge won the American League Rookie of the Year award last season after setting an MLB record for most homers in a rookie season (52).
Esports athletes are sponsored, too
Meet Red Bull-sponsored professional esports player Daryl S. Lewis, better known by his in-game name Snake Eyez. Nicole Raz Las Vegas Review-Journal.
Bettor Investments turned into a bad bet
Bettor Investments formerly operated a Nevada-licensed entity betting operation. The company promised “conservative growth, profits and stability for our investors.” Matt Stuart, who ran the fund, shut it down in late 2016 and never made good on an agreement with shareholders.
Starbucks Will Give You $10 Million for a Better Cup Design
Starbucks Will Give You $10 Million for a Better Cup Design Get your thinking caps on because the company is looking for a new cup that's easier to recycle. The $10 million grant challenge sees Starbucks partnering with investor group Closed Loop Partners for the project. According to CNN Money, Aside from the new cup design challenge, Starbucks stated it will test a cup with an inner lining made from plant fibers to prevent hot liquid from leaking. Will you join the challenge for #Bettercups?
Las Vegas bartenders who worked the Route 91 Harvest Music Festival question what they were paid
Reneé Black, left, and her husband Griffin Black talk to the Review-Journal at their home in Las Vegas, Tuesday, March 6, 2018. Reneé was a bartender at Route 91, and Griffin was a bar back. They were hired as independent contractors, but received forms months later indicating they were employees. They also were never paid their last day of tips. Nicole Raz/Las Vegas Review-Journal.
TOP NEWS
News Headlines
Events
Home Front Page Footer Listing
Circular
You May Like

You May Like