Boyd Gaming Corporation (NYSE:BYD) announced Wednesday that it will acquire casino operator Peninsula Gaming LLC for $745 million, a move that pushed the value of its small cap stock upwards, Dow Jones Newswires reported.
The acquisition allowed the company to strengthen its holdings in the American Midwest and South and will help to alleviate some of the pressure felt in its core markets of Las Vegas and Atlantic City.
According to the news outlet, the move would broaden Boyd's distribution capacity and would open up a new market for the company. Despite the large buyout, the firm believes that this acquisition will pay off in the long run.
"The Midwest happens to be a stronger performing part of the U.S.," Keith Smith, the company's chief executive, said in an interview.
In morning trading on May 17, the company's stock rose $0.41 to $7.39 a share, an increase of 5.8 percent.
Bloomberg News reported that Boyd now expects the deal to immediately add to earnings and this boost of cash flow will allow for accelerated debt reduction for assets associated with Peninsula.