Casino and racetrack operator Churchill Downs Inc. (CHDN) said Wednesday, Nov. 12, that it has agreed to acquire privately held online and mobile gaming company Big Fish Games Inc. for up to $885 million.
The deal gives Louisville, Ky.-based Churchill Downs, operator of the Kentucky Derby, entry in the fast growing online and mobile gambling space.
Seattle-based Big Fish, founded in 2002, has a library of about 3,950 online and mobile games. The company, which has around 560 employees, is known for its Big Fish Casino, Dark Parables and Gummy Drop! titles and averages about 1.15 quarterly million paying users.
"The acquisition of Big Fish and our entry into the rapidly growing mobile and online games industry gives us new products, new customers, new geographies and new sizeable growth opportunities," said Churchill Downs CEO Bill Carstanjen in a statement.
"I think we need to go big and add scale if we want to grow in this space," Carstanjen added during a Thursday morning conference call.
Carstanjen said during the call that Big Fish did not run an auction process and the acquisition was a result of talks that began a few months ago.
Churchill Downs will pay $485 million upfront and up to an additional $350 million in an earnout. In addition, Big Fish founder and CEO Paul Thelen is entitled to be paid up to $50 million if the target reaches at least $1 billion in bookings in 2016. The target had about $278 million in bookings in 2013.