Boyd Gaming to buy Peninsula Gaming for $1.45 billion

18 May 2012

Boyd Gaming will spend $1.45 billion to acquire the assets of Peninsula Gaming, giving the Las Vegas-based company a presence in Kansas, Iowa and a significant expansion in Louisiana, the company announced Wednesday.

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.

Related Links
Kansas Star Casino Details
Iowa Gambling
Kansas Gambling
Louisiana Gambling


Copyright GamingWire. All rights reserved.
Featured Vendors
RSA Executive Search
Broadband Hospitality
RSA Executive Search
A Boutique Search firm specializing in the Recruitment of Hospitality and Gaming Entrepreneurs
Broadband Hospitality
Improve these critical guest-facing amenities: In-room TV, Wi-Fi, Mobile App. Priced right. All here
TribalHub
TOP ONE TECH LIMITED
TribalHub
22nd Annual TribalNet Conference & Tradeshow Nov 8-11, 2021 Gaylord Texan Resort, Grapevine TX
TOP ONE TECH LIMITED
GLOBAL TOUCH SOLUTION PARTNER OF CHOICE,10+ years OEM manufacturing,100+ thousand units application
DFI
Casino City Press
DFI
The latest industry tech in slot and VLT motherboards, embedded systems, industrial panels
Casino City Press
A leading publisher and distributor of casino and gaming business data and market research reports.
Casino Network
Rymax Marketing Services, Inc.
Casino Network
20+ years experience selling refurbished slot machines, parts & glass for all major brands
Rymax Marketing Services, Inc.
Leader in creating award winning player & employee loyalty programs & events proven to increase ROI
Bar Maid Corporation
Betson Imperial Parts & Service
Bar Maid Corporation
Clean and dry thousands of chips, dice and tiles per hour with the high-speed CHIP CHAMPION machine!
Betson Imperial Parts & Service
Your one stop shop for all your gaming and OEM needs!
Slot Machines Unlimited
Gaming Tickets, Inc.
Slot Machines Unlimited
Exporter of IGT, Williams, AVP, Trimline, Aristocrat, Konami, Bally, & parts over 20 yrs experience
Gaming Tickets, Inc.
35 years in the gaming industry - premium quality slot tickets, lottery tickets on time under budget


Your Guide to 15,446 Gaming Industry Suppliers