Churchill Downs (NASDAQ: CHDN) has entered into a definitive agreement to acquire Big Fish Games, a producer and distributor of mobile and online games. The transaction is structured on a cash-free/debt-free basis and valued at $885 million. That amount includes a base consideration of $485 million, a potential earn-out and bonus payments of up to $350 million and $50 million based on 2015 adjusted EBITDA. The $485 million base consideration represents an 8.5x multiple of Big Fish's Adjusted EBITDA for the 12 months ended September 30, 2014. Churchill Downs, which operates racetracks, casinos and gaming websites, will incorporate Big Fish's technology to gain new products, customers, geographies and growth opportunities.