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April 1, 2013

Oxford Casino sale agreement signed, $160 million cash

The Kentucky-based Churchill Downs Inc. announced Friday it has signed a purchase agreement to buy the Oxford Casino for $160 million in cash.

The purchase remains subject to approval by the Maine Gaming Control Board, which needs to approve a gaming license for Churchill Downs before the purchase is completed, according to a press release.

According to Churchill, its agreement with Black Bear Entertainment Co. LLC includes an $8 million termination fee should the company not acquire a gaming license in Maine. The company projects that the sale for the casino in Oxford will close at the end of this year.

Churchill estimates that the $160 million price will be approximately 7.5 times the casino's year-end earnings before interest, taxes, depreciation and amortization. The casino opened less than a year ago.

The company owns Churchill Downs, host of the Kentucky Derby, and has other racetrack and casino properties around the country.

Churchill Chairman and CEO Robert L. Evans said in a prepared statement that the company's decision to acquire Oxford Casino comes from confidence that Maine is a "gaming-friendly" state and a corporate focus on newer properties in markets it has identified as defensible.

Bob Bahre, owner of Black Bear, which developed the property, said his company's focus is not operating casinos and he felt the time was right to seek a sale to a "major gaming company" like Churchill Downs.

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