08/17/2005 11:00PM

Colonial to buy management firm

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Colonial Downs has reached a deal to purchase a company owned by Magna Entertainment Corp. that had managed live meets at the Virginia racetrack, Colonial and Magna announced Thursday.

Colonial Downs, owned by Jacobs Entertainment Inc., will pay $7 million in cash and issue a $3 million one-year note to Magna for the company, Maryland-Virginia Racing Circuit Inc., which had operated Colonial's race meets since the track opened in 1996.

Maryland-Virginia Racing Circuit was set up in the mid-1990's by the Maryland Jockey Club, the owner of Pimlico and Laurel Park in Maryland. Magna Entertainment purchased a controlling interest in the Maryland Jockey Club in 2002, absorbing Maryland-Virginia Racing.

The sale is subject to approval of the Virginia Racing Commission, which meets next on Sept. 7.