US gambling operator Churchill Downs has acquired mobile app publisher Big Fish Games for up to $885m (£563m) in cash.

This figure is made up of an upfront payment of $485m – approximately 8.5 times Big Fishs EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) for the past 12 months – and a potential future payment of up to $350m based on 2015 earnings.

Best known for its hidden object games, Big Fish might seem like an odd choice for acquisition by company which owns a string of horse racing tracks and casinos. However, Churchill Downs is also a major player in online gambling in the US, a space Big Fish entered in 2012 with its acquisition of Self Aware Games, creator of an online casino platform, and the subsequent launch of its Big Fish Casino app.

“The acquisition of Big Fish and our entry into the rapidly growing mobile and online games industry gives us new products, new customers, new geographies and new sizeable growth opportunities,” said Bill Carstanjen, CEO of Churchill Downs. “While many will view this transaction as a logical extension to what we currently do with Twinspires.com, what is most important to us are the strong team and the processes and capabilities that have been built by Big Fish in Seattle, Oakland, and Luxembourg. We are excited to announce this transaction and believe we will do great things together.”

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