Boyd Gaming Corporation announced that it has entered into a definitive agreement to acquire the IP Casino Resort & Spa in Biloxi, Miss., from Imperial Palace of Mississippi, LLC, and Key Largo Holdings, LLC, for $278 million in cash. Boyd Gaming will also contribute $10 million at closing to the Engelstad Family Foundation, which will be distributed over the next five years to local and regional charitable organizations in the Biloxi area.
Following closing, Boyd Gaming plans to invest approximately $44 million in capital improvement projects at the property. Upon satisfactory completion of a 45-day due diligence period, and subject to the terms of the definitive agreement and satisfaction of various closing conditions, including the receipt of federal and Mississippi regulatory approvals, the transaction is expected to close before the end of the year.
“This acquisition is an excellent fit to our existing business and provides further geographic diversification by giving us a presence in a leading regional destination market,” said Keith Smith, president and CEO of Boyd Gaming, in a statement. “In conjunction with our divestiture of Dania Jai-Alai, this is another important step toward achieving our strategic goal of significantly strengthening our balance sheet. We will continue to look for additional acquisitions that are complementary to our current operations, deliver a solid return for our shareholders, and are priced appropriately.”
In a conference call with investors following the announcement, Smith also said the company has identified $5 million in bottom-line savings that will be achieved through synergies.
Overlooking the scenic Back Bay of Biloxi, the IP Casino Resort & Spa was completely remodeled in 2005 and features nearly 1,100 hotel rooms and suites; a 70,000-square-foot casino with 1,900 slot machines and 62 table games; 73,000 square feet of convention and meeting space; a spa and salon; and a 1,400-seat theater offering regular headline entertainment.