Pinnacle of the Deal: Ink Dry On Penn National, Boyd Gaming Buyouts of Regional Operator
Posted on: October 15, 2018, 02:26h.
Last updated on: October 15, 2018, 02:26h.
Penn National Gaming (PNG) and Boyd Gaming have each taken their chunk of Pinnacle Entertainment, and one of the most complex gaming selloffs in history is now a done deal.
On Monday, the disposition of Pinnacle’s 16 properties – with PNG taking 12 and Boyd the remaining four – was finalized, a full 10 months after the sale was first announced.
In the associated transactions, PNG is paying Pinnacle $2.8 billion for 12 properties and Boyd is paying $563.5 million for the other four.
The purchase was first announced last December and since then has been subject to review by the Federal Trade Commission (FTC). The protracted agreements also awaited the approval of 14 US states. Both of those roadblocks were cleared earlier this month, allowing for today’s dual deals to be settled.
As the company awaited state and federal clearance, PNG CEO Timothy Wilmott maintained throughout that the sale would be completed “early in the fourth quarter.” He said that integrating the 12 new properties into the company’s existing operations will help PNG “realize approximately $100 million in cost-related synergies.”
Penn National Powerhouse
Earlier this month, the FTC signed off on PNG’s $2.8 billion purchase, dependent on Boyd’s simultaneous buyoffs. The Commission’s approval didn’t come automatically: the regulator requested additional information about the acquisition in March, as it determined if the deal was in accordance with antitrust regulations.
Boyd was the linchpin to the deal, as its acquisition of four Pinnacle casinos – Missouri’s Ameristar St. Charles and Ameristar Kansas City, along with Indiana’s Belterra Casino Resort and Ohio’s Belterra Park in Cincinnati – was seen as necessary to avoiding potential monopoly concerns the FTC might have raised had PNG attempted to acquire all 16 Pinnacle properties.
One day after the FTC green lighted the deal, Nevada became the last of 14 states to approve the sale, after a special hearing of the Nevada Gaming Control Board and Nevada Gaming Commission.
PNG is taking over existing properties in Iowa, Mississippi, Illinois, Colorado, Louisiana, Nevada, Texas, Missouri, and Pennsylvania.
The company now owns 41 gaming venues across the United States and Canada and is the country’s largest regional gaming operator.
While the Boyd deal wasn’t as sizable as the $2.8 billion PNG purchase, it represents a significant expansion for the Las Vegas-based casino operator.
Belterra Park in Cincinnati is Boyd’s first property in Ohio and the two Ameristar casinos are the first two the company owns in Missouri. Boyd now operates two casinos in Indiana with the acquisition of the Belterra in Florence, Indiana.
“We have gained a strong presence in three of the Midwest’s largest gaming markets, with access to millions of potential new customers,” Boyd Gaming CEO Keith Smith said of the acquisition.
Boyd has aggressively pursued expansion over the past 12 months and now operates 29 properties in 10 states. Earlier this year, the company also bought Lattner Entertainment, an Illinois slot machine provider, for $100 million, and later paid $280 million to buy the Valley Forge Casino Resort in Pennsylvania.
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