Midlands based Gala Bingo acquired in £241m deal
MIDLANDS-based Gala Bingo Holdings has been acquired in a £241m deal part advised out of the region.
The company, the UK’s largest retail bingo operator, is being acquired by self-managed investment trust Caledonia Investments from Gala Coral Group.
Led by Chief Executive Officer, Simon Wykes, and Chief Finance Officer, Alex Wood, Nottingham-based Gala Bingo has a 38% share of the UK retail bingo market, operating a national estate of 130 clubs with over 1.1 million active members.
For its financial year to September 26, 2015, adjusted on an unaudited basis to show the standalone business being acquired, Gala Bingo reported EBITDA of £52.7m and profit before tax of £33.0m and had gross assets at that date of £189.6m.
Its principle revenue streams are Main Stage Bingo (structured lunchtime and evening sessions centred on a 90 number based game), Party Xtra (a quicker 80 number game played in the intervals between MSB games), electronic gaming machines and food and beverage.
For the deal, Holihan Lokey (George Fleet) provided corporate finance advice to Caledonia whilst legal advice was provided by Osborne Clarke (Mark Spinner) and tax advice by Deloitte (Tim Haden). Gala Coral were advised by Ashursts and the management team was represented by Brown Jacobson. KPMG provided financial due diligence services to the vendor.
Caledonia’s investment in Gala was led by Charlie Edwards, Andy Powell, Jayne Mould and Tarquin Wethered. Sally Flanagan and Charlie Edwards will join the board of Gala Bingo at completion.
On completion, which is subject to change of control approval of the Gambling Commission and finalisation of a £155m senior debt facility, Caledonia will invest £97.8m in cash to acquire 99.5% of the equity of Gala Bingo, with the management team subscribing a further £0.5m.
The acquisition will not include Gala Coral’s branded online bingo offering, galabingo.com, which will be retained by the vendor.
Commenting on the acquisition, Duncan Johnson, Caledonia’s Head of Unquoted Investments, said: “Gala Bingo is well known to Caledonia’s Unquoted Investments team and we are delighted to be backing Simon Wykes and his team in the next chapter of its history.
“Its defensive, enduring business model, which delivers strong cash generation and dividend yield, fit ideally with the investment criteria sought by Caledonia for its unquoted portfolio and complements our other assets in the Unquoted pool. As with our other unquoted investments, Gala Bingo will pay an attractive yield from inception.”
Simon Wykes said: “We are delighted to have secured Caledonia’s backing in the next phase of Gala Bingo’s development. We believe that Caledonia’s longer term, supportive investment model will give Gala Bingo the stable platform from which we can continue to develop our market leading business.”
