NEWS
Churchill to acquire Youbet.com,
United Tote
Posted: Wednesday, November 11, 2009 5:17 PM
by Frank Angst
Citing increased revenue opportunities, Churchill Downs Inc. will purchase advance-deposit-wagering platform Youbet.com for approximately $126.8-million.
Included in the Youbet purchase is United Tote, a subsidiary of Youbet.com. The two companies announced the sale in a Wednesday press release.
“We believe this combination should enable us to accelerate the development of new technology-enabled features and services that horse racing customers who wager via the ADW channel want, and that can attract new customers to racing. While we expect to make many exciting improvements for customers, our existing TwinSpires.com customers will be able to continue to access their accounts and make wagers, deposits and withdrawals in the same manner they do today.” Evans said, “We believe that the anticipated additional growth in our ADW channel handle and revenue, coupled with the expected cost synergies, make this transaction a good way to deliver additional value to CDI and Youbet shareholders.”
The companies projected $10-million in cost savings annually in combining the two companies. Churchill noted the addition of United Tote is attractive even though it saw revenue fall 17% in the first six months of 2009.
Youbet reported handle of $438-million at its ADW site and $85.8-million in revenue. Churchill will acquire all outstanding shares of Youbet. Youbet customers will see no immediate changes to the ADW site.
“We are excited about what this opportunity to combine Youbet with CDI will mean for Youbet customers, shareholders, and employees. We have worked hard to develop and deploy innovative products and services and have introduced creative online marketing tools to attract new customers to racing. Youbet’s customers will be able to continue to access their accounts and make wagers, deposits and withdrawals as they do today. We believe these capabilities will complement CDI’s strong customer relationship with core racing fans,” Youbet President David Goldberg said. “Youbet shareholders are receiving a significant premium over the current trading price for their shares and, through their ownership of CDI shares, the opportunity to participate in the potential upside of the combined company.”
In the release, the combined business announced plans to pursue other Internet business opportunities, which could include other forms of gambling if the U.S. ends restrictions on Internet wagering.
Frank Angst is senior writer for Thoroughbred Times
