Aristocrat Technologies, Inc. completed the acquisition of Big Fish Games, Inc. from Churchill Downs Incorporated.
January 08, 2018
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Aristocrat Technologies, Inc. entered into a binding agreement to acquire Big Fish Games, Inc. from Churchill Downs Incorporated (NasdaqGS:CHDN) (“CDI”) for approximately $990 million on November 29, 2017. The consideration is subject to adjustment at closing for working capital and indebtedness and certain other adjustments. Both the parties entered into in a confidentiality agreement dated July 17, 2017. Aristocrat will fund the acquisition via existing cash of $125 million and an incremental $890 million 7 year Term Loan B debt facility. Aristocrat has delivered an executed debt financing commitment letter with UBS Securities LLC, UBS AG, Stamford Branch, Citigroup Global Markets Inc. and Goldman Sachs Lending Partners LLC. Big Fish will operate as a standalone business. For the 12 months ending September 30, 2017, Big Fish reported multiple of 11.9x adjusted EBITDA and generated adjusted revenue of $458 million and adjusted EBITDA of $83 million. Big Fish Games's key game development and leadership team have entered into retention and non-compete arrangements with Aristocrat Technologies.
The transaction is subject to expiration or termination of waiting period applicable under the HSR Act, buyer receiving credit release documentation and customary closing conditions. The sale has been approved by the Board of Directors of CDI. As of December 15, 2017, early termination notice has been granted by FTC. The transaction is expected to close in the first quarter of 2018. 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 of Directors has approved up to $500 million of share repurchases from the proceeds of the Big Fish sale. The acquisition of Big Fish is expected to be EPSA accretive in the first full year of ownership.
Goldman Sachs and UBS AG, Australia Branch acted as financial advisors for Aristocrat Leisure. Catherine Dargan, Mike Riella, Becky Hurt, Lauren Shor, Kerry Burke, Rachel Beller, Lee Tiedrich, Marie Lavalleye, Andrea Reister, Daniel Gurman, Gary Rubman, Heather Haberl, James Dean, Michael Francese, Libbie Canter and Ansgar Simon of Covington & Burling LLP acted as legal advisor for Aristocrat Leisure Limited, parent of Aristocrat Technologies. Raine Securities LLC acted as financial advisor and Brian J. Fahrney, Brent M. Steele, Christina M. Sindoni, Lauren G. Grau, Mary C. Niehaus, Stephen M. Fronk, William Blumenthal and Joseph P. Michaels of Sidley Austin LLP acted as legal advisor for CDI. O'Melveny & Myers acted as legal advisor for The Raine Group LLC, parent of Raine Securities LLC.
Aristocrat Technologies, Inc. completed the acquisition of Big Fish Games, Inc. from Churchill Downs Incorporated (NasdaqGS:CHDN) on January 9, 2018. In connection with the transaction, Paul Thelen, President of Big Fish and a named Executive Officer of Churchill Downs resigned from Big Fish and removed from all director, manager and officer positions with Churchill Downs, Big Fish and any of their respective affiliates immediately following the closing. All conditions and requirements for closing have been satisfied.
Churchill Downs Incorporated is a racing, online wagering and gaming entertainment company, which is anchored by its flagship event, the Kentucky Derby. The Company owns and operates 14 live and historical racing entertainment venues in three states and nine casino gaming properties in eight states and 13 retail sportsbooks. It also operates an online horse racing wagering platform in the United States. Its segments include Live and Historical Racing, TwinSpires, and Gaming. Live and Historical Racing segment includes live and historical pari-mutuel racing at Churchill Downs Racetrack and its historical racing properties in Kentucky, Virginia and New Hampshire. The TwinSpires segment includes the TwinSpires Horse Racing, the TwinSpires Sports and Casino and the United Tote businesses. It also provides technology to support historical horse racing operations in Kentucky, Wyoming and New Hampshire. Gaming segment is engaged in the casino properties and associated racetrack facilities.