Bridgepoint has acquired the third largest casino operator in France in a deal that valued the company at €450m. The firm has bought Moliflor Loisirs from Legal & General Ventures, Royal Bank Equity Finance and the management team of the company.
A family business founded in 1948, Moliflor was the subject of an MBI in 1999. It quickly developed by acquisition to become a major national group that now employs more than 1,400 people and has over 1,700 slot machines in 20 casinos located principally in medium-sized towns in France. In 2005, the company is forecast to generate €260m in gross gaming revenue and turnover of ancillary activities. The French casino sector is estimated to be worth €2.5bn in annual gross gaming revenues.
Bridgepoint expects Moliflor, under the leadership of Marc Leonard, who has headed the group since 1999, to consolidate its position domestically through selective acquisition opportunities and organic growth on the back of local authority initiatives, as well as the roll-out of more sophisticated marketing and the development of complementary products.
“As we do with all of our majority investments, we will support the management team in pursuing value creation by accelerating the business’s development to ensure that it is well positioned to take part in sector consolidation opportunities,” said Valerie Texier, a partner at Bridgepoint in Paris. “The casino sector in France is developing as a serious alternative leisure past-time, becoming an increasingly sophisticated market that is undergoing major change.”
Debt for the transaction was provided by Bank of Ireland. Advisers involved in this transaction included: for Bridgepoint – CIBC (corporate finance), Latham & Watkins (legal) and Ernst & Young (financial due diligence); for the vendor – Lazard (corporate finance) and Linklaters (legal); for management – Franklin (legal); for Bank of Ireland – Linklaters (legal).
Bridgepoint has also acquired A-Katsastus, a vehicle inspection company based in Finland, from MB Funds, Tapiola, Finnish Industry Investment and Varma Mutual Pension Fund. The business was state-owned until 2003, when it was acquired by MB Funds, other financial investors and management.
In addition to its principal business of providing vehicle inspections and certifications that are required by law in Finland for all light and heavy motor vehicles over three years of age, A-Katsastus is also licensed to offer statutory drivers’ examinations and is the market leader in Finnish vehicle registrations. In the year to December 31 2004, it had sales of €81.3m and now employs more than 1,200 people.
From its base in Finland, the company has established a platform for international growth through operations in the recently deregulated Danish market and in Latvia, Poland and Russia.
“A-Katsastus is a well run business with a strong, scaleable domestic platform from which it can develop as the emerging northern European vehicle inspection group as other countries open up to competition and as both the breadth of testing requirements and compliance rates increase across Europe,” said Graham Oldroyd, a partner at Bridgepoint.
Bridgepoint also believes that a combination of environmental and safety pressures will drive the trend of increasing breadth of test requirements and therefore accelerate market growth.
Management (ERM), the world’s leading provider of environmental consulting services, received a formal offer from Bridgepoint on October 31 that valued the business at US$535m.
The offer was made for the 52% stake held by ERM’s current private equity backer 3i, as well as the 48% holding currently owned by ERM’s 400 employee shareholders. The transaction is expected to complete in December, subject to the usual regulatory clearances. If completed, it will be the largest LBO ever undertaken in the UK professional services sector.