Accel Entertainment to acquire Fairmount Holdings, owner of FanDuel Sportsbook & Horse Racing in Collinsville, Illinois, broadening Accel’s reach in the local gaming market
Transaction extends Accel’s local gaming footprint with the purchase of the only active horse racing venue in greater
-
Purchasing Fairmount Holdings, Inc. and its subsidiary
Fairmount Park, Inc. (collectively, “Fairmount”), the owner of FanDuel Sportsbook & Horse Racing, for 3.45 million ACEL shares (approximately$35 million consideration, based on a trailing 20-day average) from co-ownersWilliam Stiritz , former CEO of Post Holdings andRalston Purina , andRobert Vitale , current CEO and Chairman of Post Holdings -
Building on Accel’s strong distributed, ‘route-based’ platform with advantaged, single-site local gaming asset – one of two active horse racing venues in
Illinois and the only one in the greaterSt. Louis /southernIllinois market - Acquiring an active racetrack with 65 race days and approximately 435 horse races annually, an opportunity to develop a legislatively authorized casino project, and a master sports betting license used in a revenue share agreement with FanDuel
-
Accel is committed to maintaining Fairmount’s rich horse racing history, including continuing support of the Illinois Racing Board’s mission to enhance the
Illinois horse racing industry. Accel is excited to be a part of Fairmount Park’s centennial anniversary in 2025 - Intend to implement a capital efficient plan to build temporary and permanent casino facilities, improve the horse racing experience for fans and participants and partner with food & beverage (“F&B”) professionals to buildout Fairmount’s F&B amenities
-
Engaged RRC Gaming Management LLC , includingTony Rodio , former CEO of Caesars Entertainment, andHolly Gagnon , current CEO of HGC Gaming Hospitality and former CEO of several casino companies, including theSeneca Gaming Corporation , for casino development and operations - Transaction is a compelling first move in Local Gaming single-site assets – focused on convenience, with lower capital expenditure requirements and competitive intensity, and leveraging Accel’s expertise in player experience, cash logistics, regulatory compliance and capital allocation
-
Conference call today at
4:30 p.m. CT
During the year ended
“As a leading distributed gaming operator in
"I am delighted by
“We couldn’t have found better partners than Andy and his team in this transaction, and we look forward to staying fully aligned on this journey as significant equity owners from here,” noted
Compelling Strategic Rationale
-
Natural Adjacency
-
Accel’s organic and tuck-in M&A growth model has been proven over 14 years, scaling route-based gaming in
Illinois ,Montana ,Nevada ,Nebraska andGeorgia - Accel has built a deep expertise in player experience, service and cash logistics, commercial partnerships, regulatory relationships and procurement
- The acquisition of FanDuel Sportsbook & Horse Racing extends route-based capabilities to a convenient single site for locals
-
Accel’s organic and tuck-in M&A growth model has been proven over 14 years, scaling route-based gaming in
-
Attractive Return Profile
-
The transaction has two parts – acquisition of Fairmount, the holder of the license and owner of the underlying site assets, for approximately
$35 million of equity consideration, and$85 -$95 million of expected casino build-out and track investments funded from Accel’s credit facility - Projections of five year Adjusted EBITDA and robust free cash flow conversion point to an attractive return on capital – in-line with Accel’s existing route-based footprint
-
The transaction has two parts – acquisition of Fairmount, the holder of the license and owner of the underlying site assets, for approximately
-
Platform for Future Growth
-
This transaction accesses a ‘local gaming’ total addressable market (“TAM”) estimated to be approximately
$15 billion in size – or more than twice our existing route-based TAM - Local gaming assets remain largely unconsolidated, under family or small business ownership, and far less often contested by larger gaming players
-
This transaction accesses a ‘local gaming’ total addressable market (“TAM”) estimated to be approximately
Financial Highlights
The all-equity offer for Fairmount of 3.45 million shares of Accel Class A-1 common stock represents a total enterprise value of approximately
Transaction Structure and Timing
Accel will purchase Fairmount through the issuance of new shares of Accel Class A-1 common stock.
The closing of the transaction is subject to customary closing conditions and customary approvals from the Illinois Racing Board and the Illinois Gaming Board. Closing is expected in the fourth quarter of 2024. The transaction has been approved by Accel’s Board of Directors and the Board of Directors and shareholders of
Conference Call
Accel will host an investor conference call on
About Accel
Accel is a leading distributed gaming operator in
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, contained in this press release are forward-looking statements, including, but not limited to, any statements regarding the proposed acquisition, including statements regarding the anticipated benefits of the acquisition, investment and expansion plans, projected future results and market opportunities, as well as our estimates of number of gaming terminals, locations, revenues, Adjusted EBITDA and capital expenditures. The words “predict,” “estimated,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would,” “continue,” and similar expressions or the negatives thereof are intended to identify forward-looking statements. These forward-looking statements represent our current reasonable expectations, as well as assumptions made by, and information currently available to, Accel regarding Fairmount, the proposed acquisition or its anticipated effects or benefits, and involve known and unknown risks, uncertainties and other factors that may cause our or Fairmount’s actual results, performance and achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. We cannot guarantee the accuracy of the forward-looking statements, and you should be aware that results and events could differ materially and adversely from those contained in the forward-looking statements due to a number of factors including, but not limited to: the parties’ ability to satisfy the conditions to the consummation of the proposed acquisition and the risk that the proposed acquisition may not be completed in a timely manner or at all; Accel’s ability to integrate Fairmount’s operations with Accel’s own, to complete the casino development on a timely basis and within budget, and to operate the race track and casino businesses successfully; Accel’s ability to operate in existing markets or expand into new jurisdictions; Accel’s ability to offer new and innovative products and services that fulfill the needs of location partners and create strong and sustained player appeal; Accel’s dependence on relationships with key manufacturers, developers and third parties to obtain gaming terminals, amusement machines, and related supplies, programs, and technologies for its business on acceptable terms; the negative impact on Accel’s future results of operations by the slow growth in demand for gaming terminals and by the slow growth of new gaming jurisdictions; Accel’s heavy dependency on its ability to win, maintain and renew contracts with location partners; unfavorable macroeconomic conditions or decreased discretionary spending due to other factors such as interest rate volatility, persistent inflation, actual or perceived instability in the
Accordingly, forward-looking statements, including any projections or analysis, should not be viewed as factual and should not be relied upon as an accurate prediction of future results. The forward-looking statements contained in this press release are based on our current expectations and beliefs concerning future developments and their potential effects on Accel. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control), or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in the section entitled “Risk Factors” in the Annual Report on Form 10-K for the fiscal year ended
Non-GAAP Financial Information
This press release includes certain financial information not prepared in accordance with Generally Accepted Accounting Principles in
1 These statements are forward-looking and actual results may differ materially. See “Forward-Looking Statements” below for information on the factors that could cause actual results to differ materially from these forward-looking statements. Accel has not provided a reconciliation of estimated non-GAAP measures to the most directly comparable estimated GAAP measures because certain items excluded from GAAP cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation is not available without unreasonable effort.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240715641932/en/
Media
H/Advisors Abernathy
212-371-5999
eric.bonach@h-advisors.global
Source: