Caesars Entertainment Corporation has chosen to expand its operations into Indiana after the company announced that it had signed a definitive agreement of acquisition with privately-owned U.S. casino and horse racing company Centaur Holdings LLC.
Caesars stated it had made an agreement to pay $1.625 billion at closing and $75 million in deferred consideration.
This puts the total value of the acquisition of Centaur at $1.7 billion in cash.
This purchase price was agreed upon as a representation of the 8.3x implied multiple in year two after the transaction is completed. It also reflects projected synergies.
The acquisition of Centaur Holdings is seen as a move by Caesar to expand its portfolio in to Indiana. Once the deal is completed, Caesars will take ownership and control of the two racetrack-casinos operated by Centaur in Indiana: Hoosier Park Racing and Casino in Anderson and Indiana Grand Racing and Casino in Shelbyville. Centaur has been exploring a sale since May 2017. Caesar was interested in the acquisition and the opportunity to move into the central Indiana region as the company believes that it is very suitable to new investments based on under-penetration and favorable economic fundamentals.
In a statement, Mark Frissora, President and Chief Executive Officer of Caesars Entertainment, said
We are impressed with Centaur's operations and culture, and the strong presence it has built in its host communities. Together, we will build on our respective value creation and execution achievements for the benefit of customers, employees and local partners.
Centaur’s Hoosier Park and Indiana Grand offers dining, gaming, racing and various entertainment options. The combined casino area houses over 2,000 units of the latest slots and electronic table games and a venue for live and simulcast horse racing. Every year, Centaur accommodates more than 6.5 million guests in its Anderson and Shelbyville properties, with more than 1.1 million of these guests registered in their loyalty program.
The acquisition of Centaur will continue to strengthen Caesar’s footprint in Indiana, where the brand already has two casinos: Horseshoe Southern Indiana Hotel and Casino in Harrison County and Horseshoe Hammond Casino on Lake Michigan. Upon completion of the deal, Caesars expects to develop Centaur’s properties by introducing table games.
The acquisition of Centaur comes from Caesar’s aggressive 2017 development plan, after its main operating unit, Caesars Entertainment Operating Co Inc., emerged from an almost three-year bankruptcy process. The deal with Centaur is currently going through regulatory approvals and is expected to close in early 2018.