Return to search

Cinven?s #431m blockbuster

Cinven has sold the Odeon Cinema group, which it acquired two years ago, to a consortium led by WestLB and the Entertainment group in a deal worth £431 million. Richard Munton, a director at Cinven, said: “Odeon has been a very successful investment for us and we wish the company well for the future.”

The Rank Group sold the chain of UK cinemas to Cinven in February 2000 for £280 million. Cinven merged Odeon with its existing investment in ABC Cinemas. The private equity firm backed the £68 million MBO of 90 former MGM sites from the Virgin Group in 1996 to recreate the old ABC brand. The ABC operations were consolidated under the Odeon name after 2000 and a £75 million modernisation, refurbishment and new-build programme initiated.

The group now operates a total of 608 screens at 97 multiplex and city centre and accounts for more than one in four of all cinema tickets sold in the UK. Last year the company’s turnover was £212 million, with an EBITDA of £46.6 million. Richard Segal, chief executive of Odeon, said: “Over the last 3 years, with Cinven’s active support Odeon’s management team has moved forward the business considerably and created a very robust brand in the cinema market place. The company is now set to capitalise on market opportunities from an extremely sound base.”

WestLB’s Principal Finance Group led the acquiring consortium, which also includes Canadian film distributor The Entertainment Group and UK firm Rotch Property. The management team, led by Segal, is also retaining a stake. A syndicated loan is expected to back the buyout. The purchase price includes the repayment of a £260 million bond sale that was secured against future cash flows. Odeon was the first cinema to securitise its cash flows.

UBS Warburg, Morgan Stanley and Freshfields Bruckhaus Deringer advised Cinven on the deal.