Price seems reasonable. Given low borrowing rate, deal should be very accretive, particularly with synergies included.




  • Property generated $41 EBITDA as of May 11 2011; in addition, at least $5 MM in purchasing synergies (e.g. insurance) is expected, which can improve margins.
  • $1BN market; market grew 2% in 1Q 2011.
    • #2 property in the market; similar customer type to Beau Rivage
  • 13 acres of undeveloped land on the property - can be used for additional hotels/retail facilities
  • Priced at 7.2x multiple including synergies and $44m in incremental capital
  • Net debt will increase by 150-200MM to fund purchase net of jai lai sale in FL 
    • 560MM in RC availablity: 64% of commitments related to extended portion 
    • Plans to use extending portion of debt to fund purchase; non-extending portion of credit facility (330MM) will mature in May 2012.
  • Completely unrelated to whether or not they buy Borgata
  • 2,500 lot parking garage
  • B Connected program will be deployed immediately after the acquisition is approved.
  • Other BYD properties impact:
    • Treasure Chest will benefit the most from this acquisition since it's pretty close and IP can give the local New Orleans customers a more destination-type experience.
  • Shreveport property (Sam's Town) under pressure from Native American gaming in Oklahoma.
  • Insurance market: stable to slightly decreasing
  • $20MM D&A run rate; should use Blue Chip as a proxy
  • $44MM Capex used:
    • Will be spent across 10-12 months
    • Slot product--pretty up-to-date; don't see much need for replacements
  • De-leverages balance sheet by 50 bps
  • Property Maintenance capex: 5-8MM
  • Covenant risk not an issue

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more

A 'Toxic Cocktail' Brewing for A Best Idea Short

The first quarter earnings pre-announcement today is not the end of the story for Mednax (MD). Rising labor costs and slowing volume is a toxic cocktail...

read more

Energy Stocks: Time to Buy? Here's What You Need to Know

If you're heavily-invested in Energy stocks it's been a heck of a year. Energy is the worst-performing sector in the S&P 500 year-to-date and value investors are now hunting for bargains in the oil patch. Before you buy, here's what you need to know.

read more

McCullough: ‘My 1-Minute Summary of My Institutional Meetings in NYC Yesterday’

What are even some of the smartest investors in the world missing right now?

read more

Cartoon of the Day: Political Portfolio Positioning

Leave your politics out of your portfolio.

read more

Jim Rickards Answers the Hedgeye 21

Bestselling author Jim Rickards says if he could be any animal he’d be a T-Rex. He also loves bonds and hates equities. Check out all of his answers to the Hedgeye 21.

read more

Amazon's New 'Big Idea': Ignore It At Your Own Peril

"We all see another ‘big idea’ out of Amazon (or the press making one up) just about every day," writes Retail Sector Head Brian McGough. "But whatever you do, DON’T ignore this one!"

read more