Boyd Gaming Corporation announced, last Thursday, that they have struck a deal to acquire ALST Casino Holdco LLC; the holding company for Aliante Hotel in North Las Vegas for $380 million. The hotel had been rumored to be on the market for several weeks.
Industry observers generally praised the deal. Boyd Gaming did not own any properties in the lucrative, $270 million North Las Vegas gaming market and Carlo Santarelli, an analyst at Deutsche Bank, said that the purchase of the Aliante property “fills a geographic hole” in Boyd’s portfolio.
A unique buy
Keith Smith, President and CEO at Boyd Gaming said in a statement, “Aliante is an asset without rival in the North Las Vegas market, strategically positioned to benefit from substantial future growth across the northern part of the Las Vegas Valley.”
Santarelli also added that Boyd Gaming’s expectation for a 9.7% increase in revenue over the course of the year is “reasonable”.
Boyd will be bringing their loyalty program to Aliante. B Connected, Boyd’s loyalty program, allows players to collect and spend points at all participating Boyd venues; there are three levels of B Connected to experience, each with their own unique set of rewards and benefits; all of them aimed to incentivise customers to keep returning.
Wells Fargo Securities’ equity research division said that expanding their portfolio in North Las Vegas would expand Boyd’s exposure in the area; 30% of their net income comes from Nevada while the rest is generated by their operations in New Jersey, Mississippi, Louisiana, Kansas, Iowa, Illinois and Indiana.
It has been reported that gaming revenue in North Las Vegas increased 3% percent in 2015; and local indicators such as wage growth and taxable sales “remain positive,” in the area.
North Vegas Development
Investment in North Las Vegas could prove very profitable at this particular time, as North Las Vegas is set for a big economic injection. Faraday Future, a company that develops intelligent electric vehicles and mobility solutions, who decided to expand in 2015, is ready to begin construction on their $1 billion car-manufacturing plant in North Las Vegas. The project is likely to create 4,500 direct and 9,000 indirect jobs in the area.
It was mentioned in the report by Wells Fargo that, “The factory coming to Nevada is reflective of the business-friendly environment, state and local government’s focus on spurring new investment and the cities’ favourable climate and number of year-round entertainment options.”
Aliante Casino and Hotel
Aliante Casino and Hotel is a $662 million property that opened in Nevada on November 11, 2008, as a joint venture between the Greenspun Corporation and Station Casinos. As the venue opened in the middle of the Great Recession, the property struggled to survive and filed for Chapter 11 bankruptcy soon after opening; the case closed in 2012 and the property went to lenders for $378 million.
The Aliante Hotel has 202 rooms and a casino with 1,800 slot machines, 36 table games, a race and sports book and a 14 cinema Stadium.
Boyd Gaming Corporation
Boyd Gaming Corporation, a gaming and hospitality company owns 22 casinos in 8 states and a non-casino venue in Hawaii; in addition, the corporation also has a 50% share in Atlantic City's Bogarta Casino Resort.
Boyd Gaming has been making news with their expansion efforts. The deal to acquire Aliante is the second one they have been involved in in two days.
It was reported on Wednesday0 that Boyd is close to an agreement to buy Cannery Casino Resorts.
The two Cannery Casino Resorts, the Cannery and Eastside Cannery, both located in Vegas would further solidify Boyd’s strong foothold in the fast-growing northern area of the city, which has not been established as the emerging as a hub for technology start-ups, attracting affluent professionals with money to the area.
The details of the deal are expected to be officially announced soon; however, on Thursday, Boyd spokesman, David Strow stated that the company had nothing further to say about the potential business deal as the matter was still considered private.
“We’ve said many times that we are looking for ways to grow, and we look at many potential opportunities but we don’t comment on speculation about what we may or may not be interested in acquiring,” Strow added.
Boyd Gaming is actively looking for ways to expand; while we expect to hear about them a lot more over the comping months, the company has already seen much interest from investment firms that secured shares in the company earlier this year.