US gaming and racetrack operator Churchill Downs Incorporated (CDI) has completed the acquisition of social games developer Big Fish Games at a total price that could potentially rise to $885m.
The deal was first announced in November and saw CDI make an initial payment of $485m, comprising around $16m in CDI stock, up-front cash of $384m and $85m cash to be paid over three years.
An additional earn-out payment of up to $350m may be paid in cash, based on a target for Big Fish growth in earnings before interest, tax, depreciation and amortisation in 2015.
Big Fish founder and chief executive Paul Thelen will also receive a bonus payment of $50m if the business achieves bookings of $1bn in 2016, a figure based on bookings of $312m in the third quarter of 2014.
It also noted that the management team of each business shared an emphasis on innovation, technology and value creation.
It is unclear whether Thelen will remain chief executive of the business, though all employees will be subject to non-compete and non-solicitation agreements lasting two years after they leave the operator.
Goldman Sachs acted as financial advisor for the acquisition, with Sidley Austin LLP serving as legal advisor. JP Morgan took the lead on financing the transaction, with CDI raising $200m in loans to fund the deal, using an existing revolving credit facility for the remainder of the purchase price.
Qatalyst Partners LP acted as financial advisor and Perkins Coie LLP acted as legal advisor to Big Fish for the transaction.