Churchill Downs completes $250M Exacta Systems acquisition, unlocking synergies for Virginia operations

Kentucky-based Churchill Downs Incorporated (CDI) has completed its previously-announced acquisition of historical horse racing (HHR) provider Exacta Systems in a $250 million cash transaction.

Exacta is a provider of technology solutions that supports HHR operations across the US. Through its ownership of Colonial Downs Racetrack and Rosie’s Gaming Emporium historical racing machine (HRM) facilities, the acquisition will enable CDI to realize “significant and immediate” synergies related to its Virginia operations, the company said in a statement. As CDI’s tracks already house Exacta historical racing machines, the move means the company now takes charge of the full value chain.

CDI is expected to also realize additional operational improvements over time through the diversification of games available at its other HRM facilities. Exacta will operate within the company’s TwinSpires segment and will continue to service its portfolio of third-party HHR operators in Kentucky, Wyoming, and New Hampshire.

The transaction was funded with cash on hand and with the company’s existing credit facilitySupporting operations across Virginia, Wyoming, Kentucky, and New Hampshire, Exacta has integrated a number of historical racing machine developers into its platform including AGS, IGT, Light & Wonder, Everi, Konami, and Incredible Technologies. 

As for other recent news, earlier in the month CDI posted a 32% increase in net revenue for the second quarter of 2023. According to CDI’s latest financial report, the company achieved a net revenue of $768.5 million during Q2 2023, compared to Q2 2022’s performance of $582.5 million.

The substantial revenue boost was driven by significant gains across its live and historical racing and gaming segment, which achieved new adjusted EBITDA highs, contributing to an overall adjusted EBITDA of $363.7 million for Q2 – a 25% increase from the previous year’s $291.2 million.

Horse racing online wagering business TwinSpires reported slightly increased revenue of $139.1 million and flat adjusted EBITDA of $33.9 million, influenced by the B2B horse racing expansion strategy and the decision to exit the direct online sports and casino business in Q1 2022.