Boyd Gaming buying Cannery casinos in valley for $230 million

The Eastside Cannery on Boulder Highway.

Boyd Gaming Corp., fresh off its announcement last week that it would acquire the Aliante casino, said today it has reached an agreement to buy the Las Vegas assets of Cannery Casino Resorts LLC for $230 million.

The deal will give Boyd control of the Cannery casino in North Las Vegas and Eastside Cannery on Boulder Highway, next to Sam’s Town, which Boyd already owns. Considered with Boyd’s planned acquisition of Aliante, the Cannery transaction will expand the company’s reach into the northern part of the valley and further boost its profile in the Las Vegas locals market.

Boyd CEO Keith Smith said in a company statement that Cannery represented a “great tuck-in acquisition” for “an attractive price.” Smith said the deal would give Boyd a “strong foothold” in North Las Vegas, which he called “one of the fastest-growing areas” in the valley. He also promised “unique synergy opportunities” at Eastside Cannery because of its location next to Sam’s Town.

Click to enlarge photo

The exterior of the Cannery offers a view the casino's entrance, as well as a glimpse of the hotel's classic blue-collar theme.

As with the $380 million Aliante deal, Boyd said it would fund the Cannery acquisition using cash on hand. It’s expected to close in the third quarter of this year, pending approval from Nevada gaming regulators and the Federal Trade Commission.

Noting “expected synergies and operating refinements,” Boyd said it anticipated that the two Cannery casinos would generate a combined $32 million in earnings before interest, taxes, depreciation and amortization during the company’s first full year of ownership.

Once the Aliante and Cannery acquisitions close, Boyd will own 12 casinos in Southern Nevada. The company already owns three casinos in downtown Las Vegas — the California, Fremont and Main Street Station — as well as the Orleans, Gold Coast, Suncoast and Sam’s Town in other parts of the valley. In Henderson, Boyd owns the Eldorado and Jokers Wild casinos.

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

Adding the Cannery casino in particular demonstrates how strongly Boyd executives feel about the outlook for the northern valley. Smith said on Thursday that Aliante was prepared to “benefit from tremendous future growth” in that area, and today’s Cannery announcement reflected a similar view.

The Cannery has an 80,000-square-foot casino, a 200-room hotel, five restaurants and five bars, a 30,000-square-foot entertainment venue and a 14-screen movie theater. It’s located near Interstate 15 and Craig Road, and has “no competing property within a five-mile radius,” according to Boyd’s statement. Aliante is about seven miles away.

Eastside Cannery, meanwhile, features a 64,000-square-foot casino, a more than 300 room hotel, five restaurants and four bars, 20,000 square feet of meeting and ballroom space and a 250-seat “entertainment lounge,” Boyd said.

Reuters reported on Wednesday that Boyd was close to acquiring Cannery. But when the company announced its plan to buy the Aliante the next day, officials were tight-lipped about any possibility of a forthcoming Cannery transaction.

“We’re always looking for ways to grow the company,” Chief Financial Officer Josh Hirsberg said on a conference call at the time. “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.”

Boyd said it would discuss the Cannery transaction further during its first quarter earnings conference call on Tuesday afternoon.