Boyd Gaming Corp (NYSE:BYD) has finalized a definitive deal with Valley Forge Convention Center Partners, L.P., to buy Valley Forge Casino Resort in Pennsylvania, for consideration of $280.5 million. Valley Forge will be company’s first asset in Pennsylvania, and mark as the second largest commercial gaming location in the country.
The purchase price exhibits an implied multiple of seven times EBITDA, including projected incremental growth and cost synergies from the property’s imminent slot floor expansion, and prior to any operational improvements. Boyd projects the deal to be free cash flow positive as well as immediately accretive to fiscal earnings.
Keith Smith, the CEO and President, expressed that the deal of Valley Forge marks another remarkable opportunity to further expand and diversify their countrywide portfolio. With this deal, they will expand into the leading gaming state in the nation, marking a presence in a high-traffic area. Thanks to Pennsylvania’s latest approval of gaming expansion law, there exists new opportunities to lead incremental growth at Valley Forge via the expansion of the asset’s slot capacity and the launch of new ways of gaming.
Valley Forge showcases a 40,000 sq. ft. casino with 50 table games, 600 slot machines and around 500 hotel rooms. The asset also has eight bars and restaurants, and over 100,000 sq. ft. of meeting, exhibit and convention space.
Post the passage of gaming expansion law in November 2017, Valley Forge removed its consumer admission fee, and intends to increase its gaming capacity with the inclusion of 250 slot machines this year, both of which are projected to lead increased customer traffic. In addition, the legislation enables the asset to provide online gaming within Pennsylvania, and sports betting if allowed under federal law in the imminent period. The deal is projected to close in Q3 2018, contingent to customary closing conditions as well as the receipt of required regulatory permissions.