Boyd Gaming Corporation (“Boyd Gaming”) (NYSE: BYD) today announced that it has entered into a definitive agreement to acquire the Las Vegas assets of Cannery Casino Resorts, LLC, (“Cannery”) for total cash consideration of $230 million.
Under terms of the agreement, Boyd Gaming will acquire Cannery Casino Hotel, located in North Las Vegas, and Eastside Cannery Casino and Hotel, located adjacent to Sam’s Town Hotel & Gambling Hall on Boulder Highway in the eastern part of the Las Vegas Valley. Together with the Company’s recently announced acquisition of Aliante Casino Hotel and Spa in North Las Vegas, the Cannery transaction will expand Boyd Gaming’s southern Nevada portfolio to 12 properties.
“This transaction is a great tuck-in acquisition that further expands our presence in the Las Vegas Locals market at an attractive price,” said Keith Smith, President and Chief Executive Officer of Boyd Gaming. “Together, Aliante and Cannery Casino will give us a strong foothold in North Las Vegas, one of the fastest-growing areas in the Las Vegas Valley. And we will have unique synergy opportunities at Eastside Cannery, given its close proximity to Sam’s Town. Our southern Nevada assets have delivered the strongest revenue growth in our Company over the last two years, and this acquisition will broaden our portfolio in this promising market. We look forward to welcoming Cannery’s team members and customers to the Boyd Gaming family.”
With expected synergies and operating refinements, Boyd Gaming projects that the Cannery assets will generate a combined $32 million in EBITDA during the Company’s first full year of ownership, giving the transaction an implied multiple of 7.2 times EBITDA. The Company expects the acquisition to be cash flow positive and accretive to earnings per share in its first full year of ownership.
Located near Interstate 15 and Craig Road in North Las Vegas, Cannery Casino features an 80,000-square-foot casino, a 200-room hotel, five restaurants and five bars, a 30,000-square-foot entertainment venue, and a 14-screen movie theater. Cannery Casino has no competing gaming property within a five-mile radius, and is located approximately seven miles from Aliante.
Eastside Cannery has a 64,000-square-foot casino, more than 300 hotel rooms, five restaurants and four bars, 20,000 square feet of meeting and ballroom space, and a 250-seat entertainment lounge. The property is located directly south of Sam’s Town at the intersection of Boulder Highway and Harmon Avenue.
The transaction is expected to close in the third quarter, subject to the satisfaction of customary closing conditions and the receipt of all required regulatory approvals, including the Nevada Gaming Commission and the Federal Trade Commission. The transaction will be funded with cash on hand.
Morrison & Foerster LLP served as legal advisor to Boyd Gaming for the transaction. Stifel served as exclusive financial advisor and Latham & Watkins LLP served as legal advisor to Cannery.
The Company will discuss the transaction during its scheduled first-quarter 2016 earnings conference call on Tuesday, April 26 at 5:00 p.m. Eastern.
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