Churchill Downs Inc. said Tuesday it has entered an agreement to acquire most of the assets of Peninsula Pacific Entertainment LLC, or P2E, for $2.485 billion. The deal will give Churchill all of P2E’s assets in Virginia and New York along with its Sioux City casino property. That comprises Colonial Downs Racetrack, a Thoroughbred racing facility in New Kent, Virginia, as well as six “Rosie’s Gaming Emporium” horse racing facilities across Virginia. That will give the company about 2,700 historical racing machines and expand the geographic diversity of its live and historical racing entertainment venues. In New York, Churchill will acquire del Lago Resort & Casino based in Waterloo, a 96,000 sq. ft. casino with approximately 1,700 slot machines, 80 table games, a 205-room hotel, nine restaurants / bar areas, 758 covered parking spaces, a 6,000 sq. ft. sportsbook area, a 2,400-seat entertainment venue, and a 7,200 sq. ft. outdoor event venue. In Sioux City, Iowa, the company will take ownership of
Hard Rock Hotel & Casino, a a 45,000 sq. ft. casino with 639 slot machines, 20 table games, a 54-room hotel, 1,511 parking spaces with 530 covered, two live entertainment venues, a 100-piece music memorabilia collection, and a Hard Rock-branded sportsbook. Under the terms of the deal, the company is expected to sell the real property associated with Hard Rock Sioux City to a third party and then acquire the operations and lease the property from that third party. The company will have the rights to develop further venues in Virginia. The deal is expected to immediately boost per-share earnings and free cash flow. Shares were down 1.1% premarket and have fallen 4% in the last 12 months, while the S&P 500 has gained 11%.
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