In a transaction it says will immediately boost its earnings per share, Las Vegas-based Boyd Gaming plans to purchase Peninsula Gaming, owner of Opelousas’ Evangeline Downs Racetrack & Casino, for $1.45 billion. Boyd announced Wednesday that it had entered into a definitive agreement with the Iowa-based company, which operates solely in rural markets. The transaction, which is subject to various closing conditions and regulatory approvals, is expected to close by the end of this year.
The acquisition will also add Kansas Star Casino near Wichita, Kan.; Diamond Jo Casino in Dubuque, Iowa; Diamond Jo Worth in Northwood, Iowa; and Amelia Belle Casino in Amelia. Boyd already owns Delta Downs Racetrack Casino and Hotel in Vinton, Sam's Town Hotel and Casino in Shreveport and Treasure Chest Casino in Kenner.
“Acquiring Peninsula Gaming is a transformative transaction that fits perfectly into our growth strategy by expanding our company’s scale, diversifying our platform, strengthening our financial profile, and generating meaningful value for our shareholders,” Boyd President and Chief Executive Officer Keith Smith said in announcing the deal. “The Peninsula properties are a strong fit for us, as they are well-managed and operate in resilient markets in the Midwest and South. We anticipate this transaction will be immediately accretive to earnings and significantly increase our free cash flow.
“We are paying an attractive multiple for high-quality, high-margin assets,” Smith continued. “The properties operate in locations with limited gaming supply and stable tax and regulatory environments, resulting in attractive [interest, taxes, depreciation, and amortization] margins. Their management teams have considerable knowledge of their markets, and have shown they are able to operate efficiently without compromising the guest experience.”
Boyd will fund the transaction with $200 million in cash and approximately $1.2 billion in debt at the Peninsula subsidiary. In addition, a note provided by the seller of approximately $144 million will be part of the consideration.
Including its Louisiana operations, Boyd (NYSE: BYD) owns a total of 17 gaming entertainment properties located in Nevada, New Jersey, Mississippi, Illinois and Indiana.