Churchill Downs Incorporated (CDI) has entered a definitive agreement to acquire Exacta Systems, which provides technology to support historical horse racing (HHR) machines, for $250.0m.
Under the agreement, CDI would purchase all the outstanding equity interests of Exacta Systems, which provides technology for machines made by suppliers such as AGS, IGT, Light & Wonder, Everi, Konami and Incredible Technologies.
Historical horse racing machines allow players to play a slot-like game based on horse racing results. These machines are permitted in some states in which betting on horse racing is legal but traditional slot machines are not.
CDI said that the transaction would provide opportunities to realize synergies related to its recent acquisition of Colonial Downs Racetrack and the Rosie’s Gaming Emporium historical horse racing machine facilities, both of which are located in Virginia.
In addition, CDI said for tax purposes, the acquisition will be treated as an asset purchase allowing the business to realize incremental tax benefits, which will provide additional cash flow and improve the overall economics of the transaction.
CDI will fund the deal with cash on hand through its existing credit facility and, subject to receiving the required regulatory approvals, the acquisition is expected to close next year.
“For nearly a decade, Exacta has been a creative force supporting the growth of historical horse racing in the US,” CDI chief executive Bill Carstanjen said. “We look forward to expanding Exacta’s national footprint and further diversifying the game offerings available to players at HRM facilities around the country.”
The acquisition comes after CDI last month also entered into a multi-year agreement with DraftKings to develop DK Horse, a pari-mutuel wagering horse racing product for the sports betting operator.
CDI’s B2B horse racing subsidiary TwinSpires will develop the white-label solution. This will involve providing the company’s advanced deposit wagering technology to DraftKings.