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Boyd Gaming to buy Peninsula Gaming for $1.45 billion18 May 2012
The deal is expected to close by year's end. Boyd Gaming, which now owns and operates 17 gaming properties, including six in Las Vegas, said it plans to use $200 million in cash and about $1.2 billion in debt in the transaction. Boyd said it has secured financing, and a seller's note provided by Peninsula for about $144 million will be part of the deal. Boyd said Peninsula's five casinos, one in Kansas and two each in Iowa and Louisiana, are in markets showing "some of the nation's strongest growth." "This is a transformative transaction for Boyd Gaming," CEO Keith Smith told industry analysts in a conference call Wednesday. Smith said the acquisition would immediately increase company profits and cash flow. He said Boyd Gaming initially approached Peninsula Gaming, a private company based in Dubuque. Brent Stevens, CEO of Peninsula Gaming, said in a statement to the Des Moines Register that day-to-day casino operations will essentially be unchanged. "We will continue to deliver on the commitments we've made to the state of Iowa, our partners and the community, with the same focus on delivering a superior entertainment experience and value to our quests," Stevens said. The deal will require approval by the Iowa Racing and Gaming Commission. After the deal closes, 25 percent of Boyd Gaming's cash flow will come from Nevada, down from 35 percent. Smith said he remains "confident in the long-term growth of Nevada." Smith told analysts the Peninsula properties outside of Kansas are expected to add $109 million to Boyd's bottom line; its Kansas casino alone will add an estimated $107 million in 2012. He said the Kansas Star Casino in Mulvane, near Wichita, earned almost $27 million in its first full quarter of operations. Smith described the Kansas Star Casino as the "jewel of the Peninsula portfolio," representing a "long-term growth opportunity for our company." An interim facility in Mulvane opened in December, with a permanent casino and hotel to open in January. A $28 million second phase, including a 4,200-seat arena and equestrian center, will open in January 2015. Boyd Gaming will also enter the Iowa gaming market with its purchase of the Diamond Jo casinos in Dubuque and Northwood. Smith said the two properties control "more than 40 percent of the northeast Iowa" market. The company also picked up two more Louisiana properties, Evangeline Downs in Opelousas and Amelia Belle in Amelia, giving Boyd five Bayou state properties. "We already have a successful track record in Louisiana," Smith said. "They have been our strongest properties by far." Shares of Boyd Gaming rose 3.44 percent, or 24 cents, to $7.22 in after hours trading Wednesday on the New York Stock Exchange. They had lost 1 cent, or 0.14 percent, to $6.98 during regular trading before the deal was announced. The purchase price represents a multiple of seven times trailing 12-month earnings before interest, taxes, depreciation and amortization for Peninsula's four properties in Iowa and Louisiana. Boyd Gaming is obligated to make an additional payment to Peninsula Gaming in 2016 should Kansas Star's EBITDA exceed $105 million by that year. Copyright GamingWire. All rights reserved.
Boyd Gaming to buy Peninsula Gaming for $1.45 billion
is republished from CasinoVendors.com.
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