Churchill Downs Acquires Peninsula Pacific Entertainment for $2.75 Billion
Churchill Downs Incorporated (CDI) has finalized the purchase of nearly all the assets of Peninsula Pacific Entertainment (P2E) for a total cost of $2.75 billion (£2.39 billion/€2.78 billion).
The agreement, which was reached in February, encompasses all of P2E’s holdings and operations in Virginia, New York, and Sioux City, Iowa.
Following the completion of the acquisition, CDI will gain ownership of the Colonial Downs racetrack in Virginia, along with six Rosie’s Gaming Emporium historical racing machines (HRM) locations in the state, including Collinsville, Dumfries, Hampton, New Kent, Richmond, and Vinton.
“This day marks a significant achievement for Churchill Downs Incorporated,” stated CDI CEO Bill Carstanjen. “This transaction broadens our reach into Iowa, New York, and Virginia, introducing a distinctive collection of assets and appealing organic growth prospects for our company.
“We are thrilled to welcome the personnel from these well-regarded establishments to Churchill Downs Incorporated.”
Within the bustling metropolis of New York City, CDI will assume control of the Drago Resort and Casino, a sprawling gambling establishment encompassing 96,000 square feet. The casino boasts an impressive array of 1,700 slot machines and 80 table games, catering to a wide range of gaming preferences. The property also features a dedicated sports betting zone, a comfortable 205-room hotel, a diverse selection of nine restaurants and bars, ample parking for 758 vehicles, a grand entertainment venue with a seating capacity of 2,400, and a spacious outdoor event area.
The agreement extends to the Hard Rock Hotel and Casino in Sioux City, Iowa, another prominent gambling destination. This casino spans 45,000 square feet and features 639 slot machines and 20 table games, along with a Hard Rock-branded sports betting area. The property also includes a 54-room hotel, 1,511 parking spaces, and two live entertainment venues.
The P2E acquisition further encompasses certain development rights, including the potential to establish up to five new HRM entertainment venues in Virginia. These venues are projected to accommodate a total of approximately 2,300 HRMs.
CDI is also considering the construction of a new HRM entertainment venue in Dumfries, Virginia, with a capacity of up to 1,800 HRMs. The initial phase of this project is anticipated to commence in 2023. Additionally, CDI will possess the rights to develop a new HRM entertainment venue in Emporia, Virginia, with a capacity of up to 150 HRMs. The first phase of this development is expected to open its doors next year.
Furthermore, CDI will collaborate with Urban One to oversee P2E’s ongoing endeavors in developing ONE Casino and Resort, a luxurious $565 million casino destination in Richmond, Virginia.
The completion of the acquisition follows CDI’s recent announcement of record adjusted EBITDA for the third quarter. EBITDA for the quarter reached $163.2 million, marking a 4% increase.
The firms earnings climbed by six percent in comparison to the prior year.
Nevertheless, the earnings dipped by two and a half percent compared to the previous year, reaching $383.1 million. The net profit was $57 million, which is seven and two-tenths percent lower than the preceding year.
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