OMERS Private Equity (OPE), the private equity investment arm of the OMERS pension plan, in equal partnership with Alberta Investment Management Corporation (AIMCo) on behalf of certain of its clients, have signed a definitive agreement to acquire Vue Entertainment from Doughty Hanson and management for an enterprise value of GBP935m (CAD1.48bn).
Vue is an operator of multiplex cinemas in the UK, Ireland, Germany, Denmark, Portugal, Poland, Latvia, Lithuania and Taiwan. The transaction is expected to close by late July 2013.
Over the last three years, Vue has doubled the number of cinemas under its ownership from 70 to 146 and nearly doubled its screens from 678 to 1,321. Vue acquired Apollo Cinemas in the UK in May 2012, CinemaxX, Germany’s second largest operator in July 2012, and most recently agreed to acquire Multikino, the second largest operator in Poland, in May 2013. The company has also rolled out state-of-the-art digital projection technology across its circuits, opened a number of new cinemas including two of the top three highest grossing cinemas in the UK and Ireland at Vue Westfield London and Vue Westfield Stratford City.
The Vue management team, including the founder and chief executive Tim Richards, will retain a substantial equity stake and continue to manage the business.
OPE and AIMCo will support the management team as they seek to capitalise on the significant organic growth opportunities across all of its markets, and to combine this with selective acquisitions.
Mark Redman, senior managing director and head of Europe, OPE, says: "We are very pleased to be working with Tim Richards, one of the leading industry executives, and his team at Vue to support the business in its next phase of development. This is a best-in-class business featuring a first rate management team. This substantial bilateral off-market transaction demonstrates OPE’s ability to deliver for discerning vendors. We are also delighted to be partnering with a like-minded similarly-sized USD70bn institution such as AIMCo. Our combined ownership gives Vue the distinct advantage of patient capital and deep pockets for organic and acquisitive growth."
Leo de Bever, chief executive of AIMCo, says: "AIMCo is excited to be partnering with Tim and his team, alongside OPE, to support Vue’s ambition to be one of Europe’s leading entertainment companies. We consider Vue an important investment on behalf of our clients and a great complement to our private equity group’s strategy of direct investment and targeted market expansion. Vue possesses an ideal combination of qualities we seek in potential investments with their best in class management team, market leading position in their sector and opportunities for continued organic and acquisition led growth."
Tim Richards, CEO of Vue, says: "We are delighted to be embarking on the next phase of our journey with OPE and AIMCo, who share our vision of driving attractive growth and investment returns by consistently delivering an excellent entertainment experience for our customers. As the company moves forward, I am confident that we will do so from a position of real strength. We will continue to build on this success by innovating, enhancing and growing the business through our continuing plan for organic growth supplemented by strategic acquisitions."
