BILOXI, Mississippi—Boyd Gaming Corporation is planning to acquire the IP Casino Resort Spa in Biloxi, Mississippi, for US$278 million.
“This acquisition will allow us to enter … a large and stable gaming market,” Boyd president and CEO Keith Smith said during a conference call with analysts earlier this month. The 1,100-room hotel, which is being acquired for US$252,727 per room, had been owned by Imperial Palace of Mississippi LLC and Key Largo Holdings.
Smith said Boyd was attracted to the deal because it diversifies the geographic presence of its gaming locations and the property will drive cash flow at Boyd. On a trailing-12-months basis, the property generated earnings before interest, taxes, depreciation, and amortization of US$41 million through the end of May.
A total of US$150 million in net debt is being added to Boyd’s balance sheet as a result of the deal. Boyd intends to draw US$50 million from its credit facility. Certain capital market transactions will also be enacted to help pay for the acquisition.
The deal is expected to close by the end of the year. Following closing, Boyd will invest US$44 million in back-of-house capital improvements, including work on the property’s HVAC system.
There are 13 acres at the property site where Boyd might develop additional hotels or retail facilities, Smith said.
Following closing, Boyd will contribute US$10 million to the Engelstad Family Foundation, which will be distributed over the next five years to local and regional charitable organizations in the Biloxi area.
Smith indicated during the call that more deals might be in Boyd’s future. “We believe there are more opportunities to grow through acquisitions,” he said,
Contact:
Boyd Gaming Corporation
Senior VP, CFO and treasurer Josh Hirsberg
Phone: 702-792-7234
Email: joshhirsberg@boydgaming.com