Churchill Downs Inc. announced a deal Monday to purchase a Mississippi casino and hotel for about $138 million as the company best known for the Kentucky Derby expanded its gambling operations.
The Louisville-based company is buying Harlow's Casino Resort & Hotel in Greenville, Miss., from a private investment group. It has also added slot and gaming operations affiliated with its race tracks in Louisiana and Florida, and staked out a bigger share of Internet wagering by acquiring Youbet.com.
Churchill Downs President and CEO Robert L. Evans said the casino resort hotel along the Mississippi River was a good fit for the company.
''We were looking for other gaming assets that were attractive from a valuation and future growth potential, and it just so happened that this is one we came upon that met all our criteria,'' Evans said.
Churchill said the cash deal is expected to close within six months. The transaction is subject to regulatory approval.
Harlow's opened in late 2007 and features a 33,000 square-foot gaming floor with 841 slot machines, 23 table games and a poker room. The property features a five-story, 105-room attached hotel, a 2,600-seat entertainment center and three separate dining areas.
''It's a great asset,'' Evans said. ''It's brand new. It has a great team there. We like the market.''
Stephen Altebrando, an industry analyst with Sidoti & Co., was upbeat about the deal, noting Churchill estimated that the casino will add to its annual earnings-per-share performance by 27 cents to 31 cents. Another positive for Churchill is Mississippi's ''historically favorable regulatory environment and friendly low gaming tax rate,'' he said.
''We view the deal as favorable,'' he said in a note to investors.
Besides its namesake track in Louisville, Churchill Downs owns and operates three other race tracks - Arlington Park near Chicago, Calder Casino and Race Course near Miami and Fair Grounds Race Course & Slots in New Orleans.
