Boyd Gaming to purchase Aliante casino for $380 million

Boyd Gaming Corp. announced today that it has reached an agreement to buy the Aliante casino in North Las Vegas for $380 million.

In purchasing the nearly 8-year-old, upscale neighborhood casino, Boyd will increase its presence in the Las Vegas locals market and extend its reach into the north valley, where company officials say they see attractive opportunities.

Boyd executives are betting Aliante, located just off the 215 Beltway, roughly between Interstate 15 and U.S. 95, will benefit from future industrial and residential development.

“Aliante is an asset without rival in the North Las Vegas market, and it is strategically positioned to benefit from tremendous future growth across the northern part of the Las Vegas Valley,” Boyd CEO Keith Smith said in prepared remarks on a conference call with analysts. “It will further strengthen and diversify our robust Las Vegas portfolio, which is the fastest growing segment of our business.”

Boyd expects its acquisition of Aliante to create $8 million in cost savings during the first year. The company also anticipates the resort will generate earnings before interest, taxes, depreciation and amortization of more than $40 million in three to five years.

Smith said the deal would “further strengthen and diversify” Boyd’s “robust” portfolio of properties in the Las Vegas area, which he said was the fastest growing segment of its business.

Boyd already operates three casinos in downtown Las Vegas — the California, Fremont and Main Street Station — as well as the Orleans, Sam’s Town, Gold Coast and Suncoast in other parts of the valley. In Henderson, Boyd owns the Eldorado and Jokers Wild casinos.

Boyd also has other casinos in Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi and New Jersey.

Smith called Aliante a “first-in-class, market-leading asset” that was “well-built, well-maintained and will require limited additional capital in the near term.”

Its features include an 82,000-square-foot casino floor, a 170-seat race and sports book, a 202-room hotel, a 16-screen movie theater, a 650-seat showroom, 14,000 square feet of event space and a pool.

The resort opened in November 2008 under the name Aliante Station and was originally a joint venture between Station Casinos and the Greenspun family. (Brian Greenspun is CEO, publisher and editor of VEGAS INC and the Las Vegas Sun). However, a group of banks and private equity companies became the new owners in 2011 as a result of Station’s bankruptcy restructuring.

While Aliante debuted at a horrible time for the Las Vegas economy, a regulatory filing shows that its financial performance has improved in recent years. The casino reported a $6.1 million profit on $84.2 million in net revenue last year, according to the filing with the Securities and Exchange Commission.

“We are confident that Boyd Gaming will take Aliante to the next level and help it fulfill its ultimate potential,” Aliante CEO Soohyung Kim said in the statement. “The future of North Las Vegas is brighter than ever, and we expect that Aliante will continue to be mainstay of our community.”

Smith said on the conference call that he felt good about the North Las Vegas gaming market. Figures from the Nevada Gaming Control Board show the market’s casino revenue grew 2.8 percent in 2015, and Smith said it has recently outperformed the broader locals gaming market as well.

He also said the area near Aliante is poised for major long-term growth due to expected expansion in the housing supply and the facilities that companies such as Faraday Future and Hyperloop Technologies will open not far away.

“The future is very bright in that area,” he said. “It’s not happening tomorrow, it’s not happening next month...but over the next several years, I think there are just great opportunities for that market to continue to grow.”

Boyd’s announcement about Aliante followed a report from Reuters on Wednesday that the company was nearing an acquisition of Cannery Casino Resorts.

Boyd Chief Financial Officer Josh Hirsberg did not confirm or deny that report when asked about it on the conference call.

“We’re always looking for ways to grow the company,” Hirsberg said. “It’s natural that we look at a lot of different things. And we really don’t comment on acquisitions until we have a transaction...If we have something to announce, we’ll announce it. If not, you really won’t hear from us.”

The company said it would fund the Aliante transaction with cash on hand and that the deal should close in the third quarter of this year. It must be approved by Nevada gaming regulators.