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Boyd Gaming acquires second Mississippi hotel-casino
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The Associated Press File Photo
Gamblers work the machines at the IP Casino Resort in 2005 in Biloxi, Miss. Las Vegas-based Boyd Gaming acquired the hotel-casino for $278 million, giving the operator its second Mississippi property.
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LAS VEGAS REVIEW-JOURNAL
Boyd Gaming Corp. has acquired its second resort property in Mississippi with Wednesday's completion of a $278 million deal to buy the IP Casino Resort in Biloxi from Imperial Palace of Mississippi LLC and Key Largo Holdings LLC.
As part of the deal, the Las Vegas gaming company agreed to contribute $10 million to the Engelstad Family Foundation, which will be distributed over the next five years to local charities.
"This acquisition is an exciting opportunity for our company," said Keith Smith, president and chief executive officer of Boyd Gaming. "It is an excellent fit for our existing business and provides further geographic diversification by giving us a presence in a leading regional destination market."
Boyd Gaming owns Sam's Town in Tunica, Miss. The purchase of the IP, formerly called the Imperial Palace, will be funded through the company's $1.5 billion revolving credit line.
Smith, who expects the deal to close by the end of the year, said the purchase was a good opportunity. "We've always liked the Biloxi market but couldn't find the right asset," said Smith, who described Mississippi as business friendly and having a stable regulatory environment.
The Mississippi gaming industry generated $2.39 billion in gross gaming revenues last year, according to the state's gaming commission. The state's 30 casinos hosted 31.6 million visitors in 2010.
Smith said the company plans to invest $44 million in infrastructure improvements. Upon completion of a 45-day due diligence period, Boyd Gaming will make a $10 million deposit, to be applied to the purchase price, the company said.
He said the property fit the company's growth strategy, which includes possible acquisitions in Las Vegas.
"We made a run at Station Casinos. It was a long process, but we did that because we believe in the Las Vegas market," he said. "We've had our challenges, but we are slowly growing out of it. We have great confidence in the long-term viability of Las Vegas."
Remodeled in 2005, the IP features 1,100 hotel rooms and a 70,000-square-foot casino with 1,900 slot machines and 62 table games. The resort also features 73,000 square feet of convention space, eight restaurants, and six lounges and bars.
The property generated about $41 million in EBITDA, or earnings before interest, taxes, depreciation and amortization, last year.
Shares of Boyd Gaming fell 11 cents, or 1.39 percent, to close Wednesday at $7.83 on moderate volume of 1.24 million shares traded on the New York Stock Exchange. During the past 52 weeks, Boyd Gaming shares have traded from a low of $6.70 to a high of $12.70.
Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.
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Way to go Boyd, now sell the AC prop. to Gary and open the new Stardust, steel the players one at a time.
And Echelon stands idle.