Boyd to acquire Valley Forge Casino Resort
Boyd Gaming announced that it has entered into a definitive agreement to acquire the facility for US$280.5 million.
US.- Boyd Gaming Corporation announced this week that it has entered into a definitive agreement with alley Forge Convention Center Partners, LP to acquire the Pennsylvanian casino Valley Forge Casino Resort for approximately US$280 million.
By acquiring the casino, Boyd is strengthening its intentions to expand its operations in the east coast, as Pennsylvania is currently considered the second-largest commercial gaming state in the country, only behind Las Vegas, Nevada. After the the passage of a gaming expansion legislation in November, Valley Forge eliminated its customer admission fee, and plans to expand its gaming capacity with the addition of 250 slot machines in early 2018, both of which are expected to drive increased customer traffic. Moreover, Boyd could opt to offer online gambling under the new legislation and sports betting if the PASPA Act gets repealed.
The purchase price represents an implied multiple of 7 times EBITDA, including expected cost synergies and incremental growth from the property’s impending slot floor expansion, and before any operational improvements. The Company expects the acquisition to be free cash flow positive and immediately accretive to earnings.
Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: “With this acquisition, we will expand into the second-largest gaming state in the country, establishing a presence in a densely populated, high-traffic area just west of Philadelphia. And thanks to Pennsylvania’s recent passage of gaming expansion legislation, there are new opportunities to drive incremental growth at Valley Forge through the expansion of the property’s slot capacity and the introduction of new forms of gaming.”
Valley Forge features a 40,000-square foot casino with 600 slot machines, 50 table games, and nearly 500 hotel rooms. The property also has eight restaurants and bars, and more than 100,000 square feet of meeting, convention and exhibit space.
The Valley Forge transaction is expected to close in the third quarter of 2018, subject to customary closing conditions and the receipt of all required regulatory approvals. The transaction will be financed with incremental debt financing.
