Boyd Gaming is expanding its reach across the United States with the purchase of five casinos in the Midwest and Pennsylvania.
The deals will see Boyd ante up $575 million for four Pinnacle Entertainment casinos― Ameristar St. Charles and Ameristar Kansas City in Missouri, Belterra Casino Resort in Indiana and Belterra Park in Cincinnati―and $280.5 million for Valley Forge Casino Resort in the Philadelphia metropolitan area.
The acquisitions will grow Las Vegas-based Boyd to 29 properties in 10 states and bolster its positioning in the U.S. regional market in the face of a wave of competitive mergers, not least of which is Pinnacle’s pending acquisition by Penn National Gaming, which in turn will elevate Penn and potentially its listed REIT, Gaming and Leisure Properties, to 41 casinos across 20 jurisdictions.
Indeed, Penn is growing so big that the sales to Boyd were conceived amid concerns about the anti-trust fallout from the Pinnacle merger.
Meanwhile, Eldorado Resorts has transformed itself into a major regional player with last year’s merger with Isle of Capri Casinos. More recently, a newly restructured Caesars Entertainment has signaled a more bullish take on the regional market with the purchase of two large racinos near Indianapolis.
From Boyd’s standpoint, while the five acquisitions have raised concerns from debt ratings agency Moody’s, they will be immediate positives in terms of EBITDA and cash flow and provide more markets to drive revenues, which were up 10 percent for the company in 2016 and would have been higher if not for the impact of Hurricane Harvey on the company’s Southern holdings.
“We will expand our nationwide presence, operating 29 properties across 10 states,” Boyd CEO Keith Smith said in a press release. “We believe this expansion will help drive additional growth throughout our nationwide portfolio, as we market our destination properties to these new customers in the Midwest and Northeast.”
Moody’s noted, “From a strategic point of view there is a credit positive element to the these acquisitions in that they are consistent with Boyd’s geographic diversification plans, something Moody’s believes will be beneficial to the company over the longer term.”
