Just more than three years after purchasing Big Fish Games, Churchill Downs Inc. has opted to sell its mobile gaming subsidiary for nearly $1 billion and says it will focus its energy on Thoroughbred racing and casino gaming.
CDI announced Nov. 29 that Big Fish will be sold for in an all-cash deal for $990 million to Aristocrat Technologies, an indirect, wholly owned subsidiary of Aristocrat Leisure Limited, an Australian corporation.
"Big Fish is a very successful business with a bright future that will be best realized by being part of Aristocrat's strategy and vision for their online and mobile gaming portfolio," said CDI chief executive officer Bill Carstanjen. "We thank our team members at Big Fish for their outstanding efforts over the three years since CDI acquired Big Fish.
"We will refocus our strategy on our core assets and capabilities, including growing the Kentucky Derby, expanding the casino segment, TwinSpires.com and other forms of real-money gaming, and maximizing our Thoroughbred racing operations."
CDI purchased Big Fish in a deal announced Nov. 12, 2014 that was valued at $885 million. On Wednesday, the stock price for Churchill Downs Inc. closed at $221.75. That price was up $1.60 from Tuesday's close.
The sale of Big Fish to Aristocrat Technologies has been approved by the board of directors of CDI and is subject to customary regulatory approvals and other closing conditions. It is expected to close in the first calendar quarter of 2018.
CDI said proceeds from the transaction will be used for general corporate purposes, which may include investments to support organic growth and acquisitions, debt reduction, and share repurchases. The CDI board has approved up to $500 million of share repurchases from the proceeds of the Big Fish sale.
The Raine Group is acting as financial advisor to CDI, and Sidley Austin LLP is providing legal counsel.