CDI to purchase Mississippi casino

Churchill Downs Inc. (CDI) announced Monday that it has entered into a

definitive purchase agreement to acquire Harlow's Casino Resort & Hotel in

Greenville, Mississippi, in a transaction valued at approximately $138 million.

Under the terms of the agreement, CDI will pay the purchase price in cash, which

is expected to be funded from available cash on hand and CDI's revolving credit

facility. The transaction is subject to receipt of all required regulatory

approvals, including CDI securing a gaming license in Mississippi, and other

usual and customary closing conditions. Closing is expected to occur in the next

three to six months.

Harlow's was constructed in 2006 and 2007 and opened in November 2007. It is

currently owned by affiliates of private investment groups Levine Leichtman

Capital Partners, Inc. and Oak Hill Advisors, L.P., and private investor, Jess

M. Ravich.

The casino resort and hotel are located on approximately 69 acres of leased

land adjacent to the Mississippi River at the base of the new $336 million U.S.

Highway 82 Bridge that opened in August. Harlow's features a 33,000 square foot

gaming floor with 841 Class III slot machines, 23 table games and a poker room;

a five-story, 105-room attached hotel; a 2,600-seat entertainment center; and

three separate dining areas. Further information about Harlow's can be found at

www.harlowscasino.com.

For the 12 months ending July 31, Harlow's recorded $50.4 million in revenue

(net of Mississippi gaming taxes and free play). The acquisition is expected to

be accretive to CDI's reported earnings per share in the 12 months immediately

following closing of the transaction in the amount of $0.27 to $0.31 per share.

"With the acquisition of Harlow's, we continue our diversification strategy

across our racing, gaming and online business units," CDI President and Chief

Executive Officer Robert L. Evans said. "The key determinants of our decision to

acquire Harlow's were further strategic business and geographic diversification,

the appeal of Mississippi as a business and gaming location, an attractive

valuation, multiple paths to future growth, and the performance of Harlow's

outstanding team of approximately 400 employees who we look forward to welcoming

to the Churchill Downs family."

Sidley Austin LLP is acting as legal advisor to CDI in this transaction.

Bingham McCutchen LLP is acting as legal advisor and Houlihan Lokey is acting as

financial advisor to the sellers in this matter.