LOUISVILLE, KY (WAVE) - Churchill Downs announced is buying the online wagering site Youbet.com.
The deal will cost approximately $126.8 million, paid for mostly in CDI equity. Youbet shareholders and government regulators must still sign off on the deal, which could happen by the first or second quarter of 2010.
In a Nov. 12 conference call on to announce the deal Churchill Downs President and CEO Bob Evans talked about the savings by merging the companies.
"We believe we will realize $5 million in annualized cost reduction in the first few months following the close of this transaction," Evans said. "By the end of the first 12 months following the close of this transaction, we believe we will realize another $5 million in annualized cost savings."
Evans did mention that some of that $10 million would come from eliminating duplicate jobs and operations, but would not go into specifics as to job cuts for employees at either company.
"Until the transaction closes we must continue to operate our businesses as we have in the past," Evans said. "We are not permitted to coordinate or combine our operations in any way. I realize this may create some uncertainty for some of you as to what the future holds, but I trust you realize we are very limited at this time in what we are able to discuss."
Evans described the deal as a good value to shareholders citing the growth of online wagering.
"While on track wagering on live racing is relatively flat, ADW wagering continues to grow," Evans said. "We believe that slightly less than 14% of all wagering on U.S. thoroughbred racing in 2009 will be done via the internet up from about 10% in 2008."
Evans also said Youbet and Twin Spires customers will not see any changes in their accounts or to the sites as the merger goes through.