Connection Capital has completed a GBP5.2m growth capital investment to back established cinema operator, The Light.
The commitment from Connection Capital clients, which is expected to be EIS (Enterprise Investment Scheme) eligible, is supported by GBP4.5m of funding from Santander which, through its Breakthrough programme is committed to providing up to GBP200 million in growth capital to businesses in the UK.
The investment will be used to acquire a successful, nine screen multiplex cinema in the centre of Cambridge from UK market leader Cineworld. The cinema is part of Land Securities’ Cambridge Leisure development.
The investment will also fund the rollout of further sites across the UK – Bolton, Sheffield, Thetford, Dundee, Stockport and Walsall – all of which are secured under a signed agreement for lease.
The Light currently operates cinemas in New Brighton on the Wirral, Wisbech, Cambridgeshire and Halle in Germany. The business was founded in 2007 by cinema executives John Sullivan and Keith Pullinger. It is their intention to create a national network of a new generation of cinemas
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Following completion of the transaction, Simon Burke, formerly CEO of Virgin Entertainment Group and various high profile leisure and retail groups including Mitchells & Butlers and Hamleys, will assume the role of Non-Executive Chairman. Burke, a Connection Capital client, brings with him, a wealth of experience which will be of value to the management team of the Light in the implementation of its future strategy.
The existing cinemas benefit from central, easy to access locations. Both New Brighton and Wisbech are anchor tenants of broader shopping and leisure venues that provide high levels of footfall. On the Wirral, the New Brighton cinema was part of a GBP60m redevelopment and leisure project which comprises shops, restaurants and a casino.
The Light places particular emphasis on the delivery of high quality customer service by its carefully trained staff. Each of the sites benefits from contemporary architectural and interior design, and features:
• State of the art projection and sound technology
• Stadium style seating
• A café bar serving quality food and drink in a relaxed environment
The Light offers a wide range of film programming including the latest blockbusters as well as independent and international films together with live and recorded opera, sport and music events. It also works closely with the local communities to develop programmes that appeal to specific audience groups including special interest features and films, such as blockbusters, shown in a number of different languages, where appropriate.
The result is an enhanced cinema experience that attracts a mix of families, young people and adults, including the older generation who might previously have been put off by a traditional multiplex cinema.
Connection Capital clients were attracted by the opportunity to invest in an established business with clear and exciting opportunities for growth led by a high quality, highly respected management team.
Connection Capital clients were able to benefit from the advantages provided by the Government’s Enterprise Investment Scheme which was set up to encourage investment in small UK companies.
The scheme is intended to offer some compensation for the risk associated with unlisted investments.
The investment in The Light is the latest private equity transaction completed by Connection Capital. It follows commitments to leading mobile recycling business Redeem; education software business Impero and the MBO of online wine retailer, Virgin Wines. Since the beginning of 2013, Connection Capital clients have committed GBP60.2 million to 19 investments, including The Light.
The management team of the Light was advised by Spectrum Corporate Finance and Gateley were the legal advisers to Connection Capital.
Miles Otway, Partner at Connection Capital who led the deal, says: “We are delighted to back The Light Cinemas. Keith and John have a fantastic track record in the cinema industry and the business has a great opportunity to bring a better quality cinema experience to the UK market. Through working collaboratively with Keith, John and their advisors, Spectrum Corporate Finance, Connection Capital has been able to deliver a funding package that both allows the business the firepower to deliver its exciting growth plans and also forms a very attractive investment opportunity for our clients. We look forward to working with The Light in the coming months and years.”
