Debt-for-equity exit advised in Midlands

ONE OF the first exits from a ‘debt-for-equity’ swap has been achieved in a £45m deal advised in Birmingham.

A PwC team led by assistant director Victoria Marcer advised a banking syndicate headed by RBS on their exit from the swap which was arranged in 2009 as the credit crunch forced lenders to review and restructure their loan books.

The syndicate’s share in Loughborough-based adult gaming group Beacon has been sold to smaller rival Praesepe in a reverse takeover. The deal is believed to be one of the first in which debt-for-equity  lenders have exited and recovered their equity successfully.
 
Beacon owns 26 gaming centres – or amusement arcades – and six bingo clubs across the UK, employs 500 people and has a turnover of £35.9m. AIM-listed Praesepe’s acquisition is in line with an aggressive growth and diversification strategy by the Milton Keynes-based company. Beacon is Praesepe’s fifth recent acquisition and immediately increases the latter’s footprint in the gaming and bingo market by almost 60%.

Under the terms of the deal, Praesepe pays £5m through a combination of consideration shares and cash, and assume Beacon’s current £40m bank facility, which will be extended for five years.

PwC’s Victoria Marcer said: “I expect we will see more of these debt-for-equity exits, and this is a particularly great outcome for Beacon as they become part of such an ambitious AIM-listed company as Praesepe. It’s a sign of faith in the gaming sector, which has been hit by regulatory challenges such as the smoking ban.”