MGM To Acquire Boyd Gaming's 50-Percent Stake In BorgataDeal Is Worth Roughly $900 Million |
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MGM Resorts International and the real-estate investment trust it created, MGM Growth Properties, announced that MGM Resorts has reached a deal to acquire Boyd Gaming’s 50-percent interest in Borgata Hotel Casino & Spa in Atlantic City.
Buying out the stake comes with a price tag of $900 million.
“Borgata is the premier resort in Atlantic City and a great addition to our growing presence in the Northeast,” Jim Murren, Chairman and CEO of MGM Resorts, said in a statement.
Borgata is Atlantic City’s largest casino. In the first quarter of this year that ended Mar. 31, Borgata had $245.5 million of the Atlantic City casino industry’s $802.6 million in total revenue during the period. Atlantic City has eight brick-and-mortar casinos.
Borgata also has the largest online gambling business in the state. It’s one of five online casino operators there. Borgata had $45.7 million in online gaming revenue in 2015, nearly a third of the state’s total. The licensed online gaming sites under the Borgata are Borgatacasino.com, Borgatapoker.com, NJ.Partypoker.com, palacasino.com and palabingousa.com.
In February it was announced that Borgata would migrate from the Party platform to United Kingdom-based GAN, formerly GameAccount Network. The launch of the GAN-Borgata product is expected in the second quarter of this year. Borgata also has a partnership with Pala Interactive, an online gaming company from the Pala Band of Mission Indians in California.
“While the market continues to experience challenges, Borgata has outperformed and differentiated itself as the undisputed leader in the city,” Murren added. “Our decade-long partnership with Boyd Gaming has been a great one, and Borgata’s talented employee base will complement and strengthen our more than 60,000-member worldwide MGM Resorts team.”
As part of the deal, MGM Resorts and MGP have entered into an agreement whereby MGP will acquire Borgata’s real property from MGM Resorts and lease back the real property to a subsidiary of MGM Resorts. That subsidiary of MGM Resorts will operate Borgata.
MGM Resorts will sell Borgata’s real property to MGP for roughly $1.175 billion.
“We are excited to add Borgata to the MGP portfolio, further diversifying our geographic presence. With this transaction, we’re executing on our core growth strategy in prudently building a portfolio of high-quality assets with market leading competitive positions,” said James Stewart, CEO of MGP.
All the transactions are expected to close in the third quarter of this year. New Jersey gaming regulators will have to sign off on the plan.
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