Boyd acquiring Lattner for $100M

Deal to bring company into distributed gaming

Boyd Gaming Corp. is expanding into the distributed gaming segment as it seeks a new source of growth.

Boyd said Wednesday it has agreed to acquire Illinois-based Lattner Entertainment Group for $100 million.

Lattner is the 10th-largest distributed gaming operator in Illinois with 1,000 video gaming terminals in 220 locations across the state.

The Illinois distributed gaming industry posted 18 percent growth last year and generated $1.3 billion in revenue.

Boyd Chief Executive Officer

Keith Smith hinted the company could pursue additional acquisitions as it seeks to become a top player in the video gaming terminal industry.

“Lattner will provide us a valuable new avenue to access gaming customers, and a platform to participate in the expansion of distributed gaming,” he said in a statement.

“We look forward to establishing ourselves as one of the leading distributed gaming operators in the country.”

Boyd may be entering the distributed gaming industry amid expectation more states will legalize it, said Union Gaming analyst John Decree. Seven states, including Nevada, currently allow video gaming terminals, which are mainly set up in bars and taverns.

“It gives Boyd an opportunity to understand the businesses and get their feet in the door. They are trying to get ahead of the game,” he said.

Boyd is paying about eight times adjusted cash flow when taking into account Lattner’s growth and cost savings, the Las Vegas-based company said. The transaction is expected to close by the end of the second quarter.

Jefferies analyst David Katz called the acquisition a “positive” developmentforboyd.

“The distributed gaming segment of the industry is a potentially rapidly growing segment in states beyond Illinois over the next several years. Therefore, the initial entry into this segment, and the establishment of an operating platform, is appropriately positive for the story,” Katz said.

Boyd has been a major player in the consolidation boom that is reshaping the U.S. gaming industry. The company has spent nearly $1 billion over the past five months scooping up assets across the country.

The company agreed Dec. 18 to buy four properties in the Midwest from Pinnacle Entertainment for $585 million. A week later, Boyd agreed to pay $281 million for Valley Forge Casino Resort in King of Prussia, Pennsylvania.

Boyd will operate 29 casinos in 10 states, including Illinois, when those transactions close this year. Whenallissaidanddone,boyd will solidify its position as the third-largest casino operator by properties in the U.S. after Penn National Gaming and Caesars Entertainment Corp.

Contact Todd Prince at tprince@ reviewjournal.com or 702-383-0386. Follow @toddprincetv on Twitter.