Churchill Downs strikes $326m deal for Illinois-based casino

Churchill Downs strikes $326m deal for Illinois-based casino

Friday, November 2, 2018 Posted by News Team
Deal
Operator has the option to acquire venue outright, with total cost capped at $500m

Churchill Downs Incorporated (CDI) has signed a definitive purchase agreement to acquire a majority stake in the Illinois-based Rivers Casino Des Plaines.

The agreement will see CDI acquire certain ownership interests of Midwest Gaming Holdings, the venue’s parent company, from affiliates and co-investors of private equity firm Clairvest Group for a $291m fee. 

It will also acquire additional units of Midwest Gaming held by High Plaines Gaming, an affiliate of Chicago-based casino operator Rush Street Gaming, resulting in an aggregate cash consideration of at least $326m. 

Rivers Casino Des Plaines was opened in 2011, and is located two miles from Chicago’s O’Hare International Airport. It features a 44,000 square foot gaming floor with 983 slot machines and 58 table games, as well as seven dining and entertainment outlets and a multi-functional event centre. 

It is currently co-owned by Rush Street and Clairvest Group through Midwest Gaming, with Rush Street handling day-to-day operations. Post-closing, CDI and Rush Street will jointly control the venue, with Rush Street handling the day-to-day operations.

Once the transaction is closed, CDI will own at least 50.1% of Midwest Gaming, though there is scope to acquire additional shares in the venue from Rush Street and other investors. This will result in the cash consideration rising, though it has been capped at $500m. 

CDI chief executive Bill Carstanjen said deal reflected his company’s strategy of investing in properties with consistent cash flow in diverse markets. 

“We are thrilled to partner with [Midwest Gaming chairman] Neil Bluhm and Rush Street Gaming in Rivers Des Plaines,” Carstanjen said. “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.”

Midwest Gaming and Rush Street chief executive Greg Carlin added: “Churchill Downs Incorporated has created significant shareholder value over the years and we are excited to be partnering with them. 

“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.”

The transaction is subject to approval from the Illinois Gaming Borad and other customary closing conditions, and is expected to be finalised in the first half of 2019. 

The deal is the second transaction between CDI and Rush Street, after CDI acquired Rush Street’s Riverwalk Casino and Hotel in Vicksburg, Mississippi in 2012.

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