With two days before the Nov. 1 deadline, Indianapolis-based Centaur Inc., owner of Hoosier Park, closed a $1 billion financing package Tuesday.
Nearly half of that amount will go to Hoosier Park. "This will cover our licensing fee to the state," said Jeff Smith, Centaur's CEO of racing. "We'll wire the money (Wednesday)."
The state law that allowed slot machines at the two Indiana horse racing tracks required $250 million in fees to be paid by Nov. 1.
The rest of the financial package will be used at Centaur's racing site in New Castle, Pa., a Colorado racino and working capital.
"It's quite exciting," said Smith. "This is one of the largest transactions for gaming in state history."
The investment will create job opportunities, said Smith, and have a positive economic impact for Madison County and the surrounding area. "There will be 500 direct jobs and many more indirect," said Smith.
Smith said Centaur is building a new racetrack and casino in Pennsylvania that will have a 200,000 square-foot grandstand and casino. Whereas Hoosier Park will have 2,500 slot machines, the Pennsylvania site will have 3,000 machines.
The transaction was funded in part by MH Equity, Indiana's largest private equity fund, with Credit Suisse, a global investment banking firm, acting as lead arranger, sole bookrunner and administrative agent. Terms of the deal were not disclosed.
"It's an exciting day for all of us associated with Centaur," said Rick Moore, president and CEO of Hoosier Park. "This will allow us to have a first-class casino and racing facility."
He said there was a lot of construction and work to be done before the casino opens in summer 2008, but it's all to a good end.
"This will be an economic driver in the community."
More than $400 million of the nearly $1 billion package will be used locally to add a gaming operation to Hoosier Park.
"We couldn't be more pleased with our financing package," said Roderick J. Ratcliff, chairman and CEO of Centaur. "The end result of this deal speaks to the quality of our projects and the people involved in these two Indiana companies. Our success will mean more economic development in Indiana and more jobs for Hoosiers."
"MH Equity is an essential part of Centaur's strategy for the future," Ratcliff added. "In addition to its role as a financing partner in our projects in Indiana, Pennsylvania and Colorado, they have been and will continue to be important advocates for us as we continue our growth."
According to Stephen C. Hilbert, CEO of MH Equity, "We are excited about our investment in Centaur Gaming. In 1993, I worked side by side with Rod to bring Argosy Gaming to Lawrenceburg, Ind., which soon became Indiana's most successful casino."