Boyd completes purchase of four Pinnacle casinos to pave the way for the closure of Penn National’s $2.8-billion acquisition of Pinnacle
Major gaming company Boyd Gaming Corporation announced today that it has completed the purchase of four casino properties from rival Pinnacle Entertainment for the approximate amount of $563.5 million in cash. Boyd has now added Ameristar St. Charles and Ameristar Kansas City in Missouri, Belterra Casino Resort in Florence, Indiana, and Belterra Park in Cincinnati, Ohio to its portfolio of venues.
The deal has resulted in Boyd expanding its US presence across 10 states, with those being Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Nevada, Ohio, and Pennsylvania. Including the four above-mentioned casinos, the company now operates 29 properties.
The deal’s completion comes less than a month after Boyd completed the purchase of Valley Forge Casino Resort in King of Prussia, Pennsylvania.
Commenting on the closure of its latest acquisition deal, Boyd President and CEO Keith Smith said that it has expanded their portfolio significantly and has enhanced their free cash flow profile at a “compelling multiple.” The executive also pointed out that the addition of the four properties has gained them access to three of the largest gaming markets in the Midwest.
As part of the deal, Boyd has entered into a master lease agreement with casino REIT Gaming and Leisure Properties, which is the owner of the Ameristar St. Charles and Ameristar Kansas City and of Belterrra Casino Resort. In addition, Boyd has purchased both the real estate and the operation of Belterra Park to close the acquisition of all four properties.
Penn National Gaming Finalizes Purchase of Pinnacle Entertainment
The closure of Boyd’s acquisition of the four Pinnacle properties paved the way for the completion of another, bigger acquisition deal. Penn National has been able to finalize the purchase of Pinnacle in a deal valued at $2.8 billion.
News about Penn National finally acquiring its rival gaming and hospitality company arrive just over of week after the US Federal Trade Commission blessed the two operators’ marriage. However, Pinnacle was required to complete the sale of the four above-mentioned properties to Boyd in order to be able to join Penn National.
Commenting on the deal’s closure, Penn National CEO Timothy J. Wilmott said in a press release from earlier today that their acquisition of Pinnacle marked a “significant milestone” in the company’s “24-year history of growth.”
Penn National expects to realize cost synergies of around $100 million as a result from the deal and to generate further revenue synergies by “monetizing [their] database; cross marketing [their] properties; sports wagering; and further leveraging [their] social gaming platform.”
The two recently completed deals come as another manifestation of the now very persistent merger and acquisition trend across the US land-based casino sector. Urged by the growing competition, the recent legalization of casino gambling across several states, and other regulatory and non-regulatory challenges, some of the nation’s largest gambling and hospitality companies have made M&A moves to cement their position in the market or gain better position.
Caesars recently bought two Indiana-based properties from Centaur Holdings in a $1.7-billion deal, while Eldorado Resorts closed the acquisition of Tropicana Entertainment for $1.85 billion a few days ago.
The merger and acquisition deals are also anticipated to secure those involved in them with better position for entering the nascent US sports betting market following the May 14 SCOTUS ruling that annulled a long-standing ban on wagering on professional and amateur sports.
And all of the above-mentioned companies are looking to capitalize on sports betting and have moved to prepare themselves for an entry into the market. Penn National recently became one of the first two companies to be issued a sports betting license in Pennsylvania. The operator will run a sportsbook at Hollywood Casino in Dauphin County and an online operation.
Boyd has forged earlier this year a partnership with FanDuel to jointly operate sports betting services across the gaming and hospitality company’s now enlarged portfolio of properties. As for Eldorado, the company has joined forces with British bookmaker William Hill to leverage on the latter’s decades of international sports betting experience.
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The post Boyd Buys Four Pinnacle Casinos; Penn National Completes $2.8-Billion Pinnacle Acquisition appeared first on Casino News Daily.
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