Accel Entertainment acquires Fairmount Holdings for $35M

By Bobby Samwell • Tuesday, July 16 15:19 • Permanent Link

Accel Entertainment, Inc. has announced its acquisition of Fairmount Holdings, Inc., the owner of Fanduel Sportsbook & Horse Racing in Collinsville, Illinois, for a total consideration of approximately $35 million. The transaction will be paid in the form of 3.45 million shares of Accel's class A-1 common stock.

During the year ended December 31, 2023, Fairmount generated $29 million in revenue and modest adjusted EBITDA. Accel plans to invest an additional $85 * $95 million to fund temporary and then permanent casino construction and modest track investments. The company's five-year forecast suggests an adjusted EBITDA potential of $20 to $25 million and over 75% free cash flow conversion, indicating a compelling cash flow return on capital.

This acquisition extends Accel's local gaming footprint as it adds a single-site racetrack and future casino to its portfolio. The asset is expected to be the cornerstone in a local gaming platform that builds on Accel's capabilities and strengths as a leading route-based operator.

The transaction is a significant move for Accel, marking its expansion into the local gaming single-site assets with a focus on convenience and lower capital expenditure requirements. It also leverages Accel's expertise in player experience, cash logistics, regulatory compliance, and capital allocation.

The acquisition includes 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. Additionally, the transaction includes a partnership with Fanduel to participate in sports wagering in Illinois.

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. The company is also excited to be a part of Fairmount Park's centennial anniversary in 2025.

To support the development and operations of the casino, Accel has engaged RRC Gaming Management LLC, including Tony Rodio, former CEO of Caesars Entertainment, and Holly Gagnon, current CEO of HGC Gaming Hospitality and former CEO of several casino companies, including the Seneca Gaming Corporation.

Today the company's shares have moved -0.7% to a price of $10.4. For the full picture, make sure to review Accel Entertainment's 8-K report.

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