Churchill Downs Incorporated (“CDI”) announced today that, through its wholly-owned subsidiary NKYRG, LLC (“NKYRG”), it has signed a definitive agreement to acquire Turfway Park in Florence, Kentucky from Jack Ohio LLC, an affiliate of JACK Entertainment LLC (“JACK”) and Hard Rock International for total consideration of $46 million in cash, subject to certain working capital and other purchase price adjustments.
The closing of the transaction is contingent upon approval by the Kentucky Horse Racing Commission (“KHRC”). The KHRC has scheduled a meeting for October 8 and, if the change of control is approved, the parties expect to close the transaction shortly thereafter.
Subject to KHRC approval, the 2019-2020 winter Thoroughbred racing meet at Turfway Park will be conducted on racing dates previously awarded to Turfway Park for December 2019 and in accordance with the schedule of racing dates submitted by JACK to the KHRC for 2020. Upon receiving approval for the change of control, CDI will not pursue its previously announced New Latonia Racing & Gaming project in northern Kentucky and will withdraw its New Latonia race dates application with the KHRC.
Immediately after closing, CDI will commence planning for the demolition of the existing grandstand after the 2019-2020 meet, making way for development of Turfway Park Racing & Gaming (“New Turfway Park”), an up to $150 million (including today's announced purchase price) state-of-the art live and historical Thoroughbred racing facility.
“We are thrilled to welcome Turfway Park to the Churchill Downs racing family,” said Kevin Flanery, President of Churchill Downs Race Track. “Our team is poised to restore Turfway to its former glory, anchored by northern Kentucky's first historical racing machine facility. The result will be a first-class racing product fueled by increased purses that keeps high-quality horses in Kentucky year-round and appeals to horseplayers nationwide.”
New Turfway Park is anticipated to support up to 400 direct full and part time equivalent positions and create an estimated 800 direct construction jobs. The project will include a historical racing machine facility featuring up to 1,500 machines, a state-of-the-art clubhouse, food/beverage venues and a new inner dirt track to complement the existing one-mile synthetic main race track.
The transaction is structured as an acquisition of all of the outstanding equity of Turfway Park, LLC and the $46 million acquisition price will be funded with cash from CDI's balance sheet. Of this amount, $36 million (subject to certain working capital and other adjustments) will be paid to JACK and will be capitalized on CDI's balance sheet. The remaining $10 million will be paid to Hard Rock and will be expensed.
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