Churchill Downs Inc. to acquire Big Fish Games

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Churchill Downs Inc. has agreed to acquire Big Fish Games, one of the world's largest producers and distributors of mobile and online gaming.

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Marty Finley

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Churchill Downs Inc. plans to acquire one of the world's largest producers and distributors of mobile and online gaming.

Churchill Downs (NASDAQ:CHDN) and Oakland, Calif.-based Big Fish Games Inc. have entered a merger agreement in which Churchill Downs will obtain Big Fish's outstanding stock and equity interests, according to a news release.

The deal has a projected value of $885 million, including a base amount of $485 million and a potential "earn-out payment" that could reach $350 million, according to the release.

The terms of the agreement also include a potential bonus of $50 million paid to Paul Thelen, founder and CEO of Big Fish games, which is based on 2016 bookings, the release stated.

Most of the purchase price will be paid in cash, though roughly $15 million will be paid in Churchill Downs common stock to Thelen, the news release stated.

The deal, which has been approved by both companies' boards of directors, is contingent upon regulatory approvals and closing conditions and is expected to close by year's end.

"The acquisition of Big Fish and our entry into the rapidly growing mobile and online games industry gives us new products, new customers, new geographies and new sizable growth opportunities," Bill Carstanjen, CEO of Churchill Downs Inc., said in the news release. "While many will view this transaction as a logical extension to what we currently do with Twinspires.com, what is most important to us are the strong team and the processes and capabilities that have been built by Big Fish in Seattle, Oakland, and Luxembourg."

Thelen said in the release that Churchill Downs is a "great cultural fit" for the services that Big Fish Games provides and the markets it serves.

Marty Finley covers economic development, commercial real estate, government, education and sports business.