In a deal worth about $127 million, Churchill Downs Inc. has agree to purchase Youbet.com Inc., giving Churchill about half of the $1.4-billion online horse-wagering market. Churchill already owns and operates TwinSpires.com, which earlier incorporated Brisbet.com, as well as HorseRacing TV (HRTV), nine racetracks and 19 off-track wagering sites. Youbet owns United Tote, which manages the wagering equipment used by some racetracks, with that company losing a reported $11.2 million last year and $18 million in 2007. Youbet reportedly had losses the last three years, including $4.5 million in 2008, but has reported profits in each of this year’s first three quarters. In a release issued Wednesday, Churchill president and CEO Bob Evans stated Youbet will continue to operate as an independent company and there are no plans to move the company to its base in Louisville, Ky.
“For the foreseeable future, we don’t expect that you will experience any major changes with the Youbet wagering platform or the overall operation of the company,” Evans stated in the release sent to the media and Youbet customers. “We will continue to work to improve your wagering experience and to bring you new and innovative offerings.
Youbet shareholders will receive 97 cents a share in cash, plus .0598 shares of Churchill Downs stock. With Churchill’s stock closing at a price of $31.57 a share on Wednesday, that translates to a value of about $2.86 per share. Youbet shareholders will eventually own 16 percent of Churchill stock, according to Evans.
Evans said he expects the purchase agreement to close sometime during the first half of 2010.
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