Churchill Downs completed its $178.9 million purchase of the Presque Isle Downs & Casino in Erie, Pennsylvania from Eldorado Resorts on Friday.
The deal had been announced last year and was approved by the Pennsylvania Gaming Control Board and the Pennsylvania State Horse Racing Commission. Churchill Downs funded the transaction with cash and through the company’s line of credit.
Presque Isle opened its casino in February 2007 and operates approximately 1,600 slot machines, 32 table games and a poker room. Presque Isle also conducts live thoroughbred horse racing.
“Presque Isle will give us a foothold in Pennsylvania and the opportunity to participate in the sports betting and online gaming market throughout the state,” Churchill Downs CEO Bill Carstanjen said in a statement. “This acquisition is projected to be immediately accretive to our shareholders.”
Eldorado acquired the Presque Downs through its acquisition of Isle of Capri Casinos in April 2017.
Prior to the transaction’s completion, Jefferies gaming analyst David Katz upgraded his view of Churchill Downs, telling investors the year-end weakness in the company’s stock price created a “compelling entry point.”
Katz said Churchill Downs has a “top tier balance sheet” and several growth opportunities.
“By our measure, the value of asset base and franchises, execution by management and capital and cash flow profile should lead to continued upside to estimates and the shares,” Katz said in a research note.
Katz said two other company properties will help spur investor interest.
Churchill Downs was approved by Kentucky for development at its Oak Grove property, that includes 1,500 gaming machines, a 125-room hotel and other entertainment options. The company is also in the process of acquiring 50.1 percent of the Rivers Casino in Des Plaines, Illinois for $291 million.
“While not financially pivotal, the partnership with (Rivers Casino owner) Rush Street provides a wide scope of synergistic benefits,” Katz said.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
