IPO of the Week: MGM Growth Properties LLC

Josef Schuster
Dr. Josef Schuster is the founder of Chicago-based IPOX Schuster LLC and chief architect of the IPOX® Indexes. The IPOX methodology is implemented in an IPO and spin-off strategy at Catalyst Funds. Before founding IPOX, Dr. Schuster pursued his academic work on European IPOs in the Financial Markets Group (FMG) at the London School of Economics (LSE), where he completed his MSc and PhD and conceived the idea to start IPOX. He regularly appears in the media as an expert in global New Listings and respective investment products.

Company Description

MGM Growth Properties  LLC (MGP) is a growth-oriented REIT formed in 2015. The entity engages in the acquisition, ownership and leasing of large-scale destination entertainment and leisure resorts, whose amenities include casino gaming, hotel, convention, dining, entertainment and retail offerings. Assets in MGP’s portfolio include properties of MGM Resorts International (MGM) concentrated in Las Vegas.

Business Model

MGM Growth Properties generates revenues through rent payments under the Master Lease with MGM.

IPO History

On 04/20/2016, MGM Growth Properties made its REIT offering on NYSE led by BofA Merrill Lynch. The share was priced at $21.00 per share, top of its expected range of $18 to $21 per share. With a full subscription of 50 million shares and an additional 15% over-allotment option fully exercised, MGM Growth Properties was valued at $1.05 billion at offer. The stock opened at $22.75/share and closed the first day down to $22.01. MGM Growth was included in the IPOX® 100 U.S. Portfolio on 06/17/2016 and currently weighs approximately 0.6% of the portfolio.

Historical Performance

Growth Outlook

Industry Comparison