Done Deals: CSFB Cries Bingo!’ in the U.K. –

Bingo, anyone? In one of the year’s biggest non-tech European platform acquisitions to date, Credit Suisse First Boston Private Equity this month acquired Gala Group Ltd., a company which owns a chain of bingo clubs in the U.K., from PPM Ventures, the private equity arm of Prudential plc, for a total transaction size of $640 million. The transaction was financed with approximately $185 million in equity from CSFB Private Equity, coupled with approximately $315 million senior debt tranche led by J.P. Morgan and $160 million in high yield bonds issued by Credit Suisse First Boston. Gala management will retain a 10% stake in the company.

Richard Winckles, managing director at CFSB’s office in London, said the existing shareholders disagreed on expansion strategies and decided to sell the company. The company was subsequently advised by CSFB’s investment banking arm and was auctioned off to five bidders where CSFB’s private equity group emerged as the eventual buyer.

Gala operates 149 bingo clubs in the U.K. market and reported approximately $59 million in EBIT in 1999.

“The environment is good because the gaming business in the U.K. is being deregulated and we think we can use the Internet to bring Bingo into more homes,” said Winckles. Winckles added that Bingo is a very popular in the region because it serves as a social gathering for middle-aged women rather than a gambling event. “We also think we can use Gala to acquire add-on companies in the gaming industry-specifically soccer and off track betting.”

Winckles said equity for the investment came out of CSFB International Equity Partners LP, half of which has been invested. The firm held a final closing of the fund on $608 million in July 1998 (BUYOUTS July 6, 1998, p. 14). Winckles also mentioned that CSFB will be raising a European and an international fund in the first half of 2001.

CSFB International Equity Partners’ other European investments include Frida, a food company based in Spain and Belcom, a radio and television station based in Switzerland.

CSFB Private Equity is the global private equity arm of the Credit Suisse Group, a global financial services firm. The firm has offices in New York, London, Hong Kong, Sao Paolo and Moscow.