Churchill Buys Mississippi Casino for $138M

Trasaction will be paid for with cash on hand and CDI's revolving line of credit.

Churchill Downs Incorporated has entered into an agreement to acquire Harlow’s Casino Resort & Hotel, in Greenville, Miss., for approximately $138 million.

According to a statement from the company, CDI will pay the purchase price in cash using available cash on hand and CDI’s revolving credit facility.

The casino, which opened in November 2007, is owned by affiliates of private investment groups Levine Leichtman Capital Partners, Inc. and Oak Hill Advisors, L.P.; and private investor Jess M. Ravich.

The casino and hotel are located on approximately 69 acres of leased land adjacent to the Mississippi River at the base of the new $336 million U.S. Highway 82 Bridge. The casino has a 33,000 square foot gaming floor, with 841 Class III slot machines, 23 table games, and a poker room. In addition, there is a five-story, 105-room attached hotel; a 2,600-seat entertainment center; and three separate dining areas.

For 12 months ending July 31 Harlow’s recorded $50.4 million in revenue (net of Mississippi gaming taxes and free play). CDI said the acquisition will be accretive to CDI’s reported earnings per share in the 12 months immediately following closing of the transaction in the amount of $0.27 to $0.31 per share.

Pending all regulatory approvals, including CDI securing a gaming license in Mississippi, closing on the deal is expected within three to six months.

"With the acquisition of Harlow’s, we continue our diversification strategy across our racing, gaming and online business units," CDI president and chief executive officer Robert L. Evans said in a statement. "The key determinants of our decision to acquire Harlow’s were further strategic business and geographic diversification, the appeal of Mississippi as a business and gaming location, an attractive valuation, multiple paths to future growth, and the performance of Harlow’s outstanding team of approximately 400 employees who we look forward to welcoming to the Churchill Downs family."