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LOUISVILLE, Ky., Oct. 5, 2012 (GLOBE NEWSWIRE) -- Churchill Downs Incorporated ("CDI" or "Company") (Nasdaq:CHDN) announced today, Friday, October 5, 2012, that it has entered into a definitive purchase agreement to acquire Riverwalk Casino and Hotel ("Riverwalk" or "Sellers") in Vicksburg, Miss., for total consideration of approximately $141 million, to be paid in cash.
The transaction, which is contingent upon the Company securing a gaming license from the Mississippi Gaming Commission and other usual and customary closing conditions, is anticipated to close by the end of the year. If certain closing conditions are not satisfied, the Company could be obligated to pay a $7 million termination fee.
The transaction price represents a multiple of approximately 7.4 times the property's trailing twelve month EBITDA (earnings before interest, taxes, depreciation and amortization) and will be funded through the Company's existing credit facility. While the acquisition is an equity transaction, for tax purposes it will be treated as an asset transaction which the Company expects will provide tax benefits that will effectively reduce the transaction price multiple to approximately 6.4 times the property's trailing twelve month EBITDA.
The transaction is expected to be immediately accretive to earnings per share by approximately $0.31.
Based on historical performance, the Company estimates that Riverwalk's annual impact is expected to be approximately $55 million in revenue (net of promotional allowances), $19 million in EBITDA, and $9.9 million in free cash flow (EBITDA minus maintenance capital, interest and taxes).
CDI Chairman and CEO Robert L. Evans said this acquisition continues to reflect CDI's commitment to the Company's growth via diversification strategy.
"We are excited to have another property in the business-friendly state of Mississippi to add to our Harlow's Casino Resort & Hotel property in Greenville, located 90 miles north of Riverwalk along the Mississippi River," Evans said. "Riverwalk is an attractive investment for CDI as it is a newer facility with superior design, high quality amenities and is operated by an outstanding team of over 400 employees with whom we look forward to working in the near future. We continue to look for opportunities to invest capital in growth opportunities, and we are hopeful that other jurisdictions, such as Kentucky and Illinois, will offer us a similar opportunity to invest and create jobs in the near future."