Churchill Downs Incorporated has entered into a “definitive agreement” to acquire certain ownership interests of Midwest Gaming Holdings, which will see the firm secure a stake of at least 50.1 per cent in Rivers Casino Des Plaines in Illinois.
The Transactions, which are contingent upon approval by the Illinois Gaming Board and other usual and customary closing conditions, are anticipated to close in the first half of 2019.
Further details of the acquisition are stipulated as: “the Sale Transaction will be comprised of, (i) CDI’s purchase of 100% of the ownership stake in Midwest Gaming held by affiliates and co-investors of Clairvest Group for approximately $291 million, and (ii) CDI’s offer to purchase, on the same terms, additional units of Midwest Gaming held by High Plaines Gaming, an affiliate of Rush Street Gaming, and Casino Investors, resulting in aggregate cash consideration of at least $326 million”.
Marking the second transaction involving CDI and Rush Street, following the Riverwalk Casino and Hotel in Vicksburg, Mississippi from the latter in 2012, Bill Carstanjen, CDI CEO, explained: “We are thrilled to partner with Neil Bluhm and Rush Street Gaming in Rivers Des Plaines. This property is the crown jewel of Illinois gaming, and one of the country’s premier casinos.
“This is an exciting opportunity for CDI, given Rivers Des Plaines’ superior design, unparalleled location in the Chicagoland market, high-quality amenities and outstanding team.”
“Churchill Downs Incorporated has created significant shareholder value over the years and we are excited to be partnering with them” added Greg Carlin, CEO of Midwest Gaming and Rush Street Gaming. “We will work together to ensure that Rivers Casino in Des Plaines continues to be one of the most successful casino destinations in North America.”
This comes as CDI reports a 12.3 per cent net revenue increase in the third quarter of the year, reaching $221.3m (2017: $196.9m), with adjusted EBITDA also rising 6.8 per cent year-on-year from $58.1m to $62.1m.
CDI also saw a $39.6m boost to net income for the period, rising from 2017’s $16.7m to $56.3m, which the company attributed to a number of contributing factors, primarily a $42.3m net tax gain on the acquisition of the remaining 50% equity interest in Ocean Downs, in exchange for the 25% equity interest in Saratoga New York and Saratoga Colorado properties.