Wednesday, May 16, 2012
The parent company of a Kansas state-owned casino has been sold to Boyd Gaming Corporation.
The $1.45 billion sale includes the Kansas Star Casino in Mulvane;
Diamond Jo Casino in Dubuque, Iowa; Diamond Jo Worth in Northwood, Iowa; Evangeline Downs Racetrack & Casino in Opelousas, Louisiana; and Amelia Belle Casino in Amelia, Louisiana.
The purchase price represents an annualized run-rate for Kansas Star based on its first-quarter 2012 EBITDA of $26.8 million, and corporate expense of $10 million.
Ken Smith, President and Chief Executive Officer of Boyd Gaming, said the acquisition will diversify the company's platform.
"The Peninsula properties are a strong fit for us, as they are well-managed and operate in resilient markets in the Midwest and South," Smith said.
The Company has obtained committed financing for the entire transaction. Boyd Gaming will fund the transaction with $200 million in cash and approximately $1.2 billion in debt at the Peninsula subsidiary. In addition, a note provided by the seller of approximately $144 million will be part of the consideration.
Under the terms of the transaction, Boyd Gaming is obligated to make an additional payment in 2016 should Kansas Star's EBITDA exceed $105 million in 2015. The additional payment would be 7.5 times additional EBITDA over $105 million.
Boyd Gaming expects the transaction to close by the end of 2012.