Boyd Gaming Corp. BYD has agreed to acquire fellow casino operator Peninsula Gaming LLC for $200 million in cash, expanding the U.S. gambling company's footprint in the Midwest and South.
Under the deal, Boyd will take over privately held Peninsula's Kansas Star, Diamond Jo, Diamond Jo Worth, Evangeline Downs and Amelia Belle casinos, which are located in Kansas, Iowa and Louisiana. The deal includes $200 million of cash consideration plus about $1.2 billion of assumed debt. Peninsula also will include a roughly $144 million note as part of the deal.
Boyd President and Chief Executive Keith Smith called the deal a "transformative transaction that fits perfectly into our growth strategy" by broadening the regional operator's scale and bolstering its financial profile.
Boyd, one of Las Vegas's oldest gambling companies, had posted mostly weaker results in recent quarters as revenue from its other casinos in the South and Midwest--once a source of solid revenue growth--failed to keep up with growing costs.
Its first-quarter results still improved over last year's pressured bottom line, delivering a stronger-than-expected core profit.
Boyd expects its latest purchase, which is slated to close by the end of this year, to add immediately to its earnings.
Boyd is required to make additional payments in 2016 if a measure of Kansas Star's earnings tops $105 million in 2015.
Boyd shares closed Wednesday down one cent at $6.98 and were inactive after hours. The stock is off 28% over the past year.
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