Boyd Gaming to buy Peninsula Gaming for us$ 1.45 billion

The deal should close by the end of the year. Boyd has lined up the financing it needs for the acquisition. It plans to use us$ 200 million in cash and about us$ 1.2 billion in debt. A note provided by Peninsula for about us$ 144 million will be part of the deal. 
CEO Keith Smith said the purchase is expected to immediately boost Boyd's profits and cash flow. "We are paying an attractive price for these assets," Smith said in a conference call with reporters.

Boyd Gaming will be obligated to make additional payments in 2016 if Peninsula's Kansas Star casino reports earnings before interest, taxes and other factors of more than us$ 105 million in 2015. In that case, Boyd will pay 7.5 times the profits that exceed us$ 105 million.

At the end of 2011, Boyd Gaming owned 16 casinos in Nevada, Illinois, Louisiana, Mississippi, Indiana and New Jersey. Smith said the company is not overextending itself in Louisiana, one of its most lucrative markets.

The deal allows Boyd to expand to two new states: Kansas and Iowa. In Kansas, the deal covers the purchase of the recently opened Kansas Star Casino. "Scale is very important in our industry," Smith said.

Shares of Boyd Gaming fell 1 cent to close at us$ 6.98. The stock has traded between us$ 4.12 and us$ 9.83 in the last 52 weeks.