Magna Entertainment Corp. announced Tuesday an agreement to buy Flamboro Downs Holdings for $47 million, which will give the Ontario-based racetrack conglomerate its first racetrack in Canada.
The harness track, located 45 miles west of Toronto near Hamilton, Ontario, runs about 260 live days, operates seven off-track betting parlors, and houses 750 slot machines operated by the Ontario Lottery and Gaming Corp. Flamboro Downs receives 20% of the "net win," which is slot machine revenue minus what is paid to players, with one-half of that amount added to purses and the other half being retained by the racetrack.
"Flamboro Downs is located in a great community and it is well supported by harness racing interests in the Province of Ontario," said Jim McAlpine, Magna's president and chief executive officer. We look forward to working with the Ontario harness racing industry in the years ahead to continue the growth of harness racing in Ontario."Charles Juravinski, chairman of Flamboro Downs, said he was delighted with the deal."It has always been my vision and dream to have Flamboro Downs become a destination entertainment venue not only for horseracing enthusiasts but for entire families," he said. "I am sure I express not only my sentiment but also the sentiments of our loyal customers and the entire Flamboro Downs family when I say how pleased I am to see Flamboro Downs integrated into the MEC family."The acquisition cost, which is subject adjustments at closing, is expected to be approximately US$47 million, and will be satisfied by a vendor take-back mortgage of approximately US$26 million with the remainder paid in cash. The transaction is expected to close in the third quarter of 2002 and is subject to regulatory approval.Since December 1998, Magna has purchased eight Thoroughbred racetracks for a total of $340 million. The company has a pending deal to acquire Lone Star Park near Dallas for $80 million in cash and assuming $19 million in debt. Magna also owns The Meadows harness track near Pittsburgh, which is acquired in a package from Ladbrokes that included the Call-A-Bet telephone account wagering services and a portion of the former Racing Network, and the Multnomah Greyhound Park near Portland, Ore. In addition, Magna leases Portland Meadows in Oregon.