Boyd Gaming to Acquire Peninsula Gaming For $1.45 Billion

Transaction Will Strengthen Boyd Gaming's Financial Profile and Drive Growth; Expands Geographic Diversity and Increases Scale

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. May 18, 2012

May 18, 2012 -Boyd Gaming Corporation (NYSE: BYD) announced that it has entered into a definitive agreement to acquire Peninsula Gaming, LLC, for total consideration of $1.45 billion.

The acquisition will complement Boyd Gaming's existing portfolio by adding five properties in some of the nation's strongest growth regions: Kansas Star Casino near Wichita, Kansas; Diamond Jo Casino in Dubuque, Iowa; Diamond Jo Worth in Northwood, Iowa; Evangeline Downs Racetrack & Casino in Opelousas, Louisiana; and Amelia Belle Casino in Amelia, Louisiana. The acquisition will also complement Boyd Gaming's existing portfolio by adding five properties in some of the nation's strongest growth regions: Kansas Star Casino near Wichita, Kansas; Diamond Jo Casino in Dubuque, Iowa; Diamond Jo Worth in Northwood, Iowa; Evangeline Downs Racetrack & Casino in Opelousas, Louisiana; and Amelia Belle Casino in Amelia, Louisiana.

The purchase price represents an EBITDA multiple of 7.0 times based on the trailing 12-month EBITDA of $109 million for Peninsula's Iowa and Louisiana properties, an annualized run-rate for Kansas Star based on its first-quarter 2012 EBITDA of $26.8 million, and corporate expense of $10 million.

"Acquiring Peninsula Gaming is a trans-formative transaction that fits perfectly into our growth strategy by expanding our Company's scale, diversifying our platform, strengthening our financial profile, and generating meaningful value for our shareholders," said Keith Smith, President and Chief Executive Officer of Boyd Gaming. "The Peninsula properties are a strong fit for us, as they are well-managed and operate in resilient markets in the Midwest and South. We anticipate this transaction will be immediately accretive to earnings and significantly increase our free cash flow."

Smith added, "We are paying an attractive multiple for high-quality, high-margin assets. The properties operate in locations with limited gaming supply and stable tax and regulatory environments, resulting in attractive EBITDA margins. Their management teams have considerable knowledge of their markets, and have shown they are able to operate efficiently without compromising the guest experience."

Subject to the satisfaction of various closing conditions and receipt of required regulatory approvals, Boyd Gaming expects the transaction to close by the end of 2012.

The Company has obtained committed financing for the entire transaction, and anticipates it will be deleveraging. Boyd Gaming will fund the transaction with $200 million in cash and approximately $1.2 billion in debt at the Peninsula subsidiary. In addition, a note provided by the seller of approximately $144 million will be part of the consideration.

Under the terms of the transaction, Boyd Gaming is obligated to make an additional payment in 2016 should Kansas Star's EBITDA exceed $105 million in 2015. The additional payment would be 7.5 times additional EBITDA over $105 million.

Greenhill & Co., LLC served as the exclusive financial advisor and Morrison & Foerster LLP served as legal advisor to Boyd Gaming. Bank of America Merrill Lynch, J.P. Morgan and Deutsche Bank Securities Inc. provided the committed financing for the transaction.