LOUISVILLE, Ky., March 29, 2013 (GLOBE NEWSWIRE) -- Churchill Downs Incorporated (CDI or Company) (Nasdaq:CHDN) announced that it has entered into a definitive purchase agreement to acquire Oxford Casino (Oxford) in Oxford, Maine, for total consideration of approximately $160 million, to be paid in cash.
The transaction, which is dependent on the Company securing a gaming license from the Maine Gaming Control Board, and on other usual and customary closing conditions, is anticipated to close in the fourth-quarter of 2013. If certain closing conditions are not satisfied, the Company could be obligated to pay an $8 million termination fee.
The property opened in June 2012 and completed an expansion of its gaming floor in early October 2012; thus, only limited actual financial data is available. Based on the Company's projections and Oxford's management team's budget, the Company expects that at closing the transaction price will represent a multiple of approximately 7 ½ times the property's then-trailing twelve month EBITDA (earnings before interest, taxes, depreciation and amortization.) The transaction is expected to be immediately accretive to earnings per share and provide annual free cash flow of approximately $12.5 million.The transaction 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. CDI Chairman and CEO Robert L. Evans explained why Oxford Casino was an appealing investment for the Company. "The acquisition of Oxford continues our focus on investing capital in gaming-friendly states, in newer properties, in what we believe are competitively defensible markets, and at valuations that we believe will result in significant future free cash flow generation at rates of return attractive to our shareholders," Evans said. "The Oxford team of over 400 employees has done an exceptional job and we look forward to welcoming them into the Churchill Downs family."