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PPM Ventures hits the jackpot

PPM Ventures has sold its interest in French gaming group, Moliflor Loisirs to an investor group led by Legal & General Ventures (LGV) and including Royal Bank Private Equity. Total value of the transaction was EURO400 million. Since PPM Ventures acquired the group in 1999 its operating profit has increased fivefold.

Moliflor was created as a family business in 1948 and went public in 1998. In June 1999 PPM Ventures took the company private and acquired the casino group of Uriage near Grenoble in a deal valued at EURO77 million for a total of eight casinos. The management team, led by Philippe Gazagne and Bertrand Coltier has since further built the group acquiring another seven sites and creating an eighth one. Today, Moliflor is the fourth largest gaming group in France with an 8.4 per cent market share. The group is planning further acquisitions and is aiming to be one of the leading casino operators in France. The French casino market is the largest in Europe with 170 casinos accounting for EURO2.3 billion in gross gaming revenues in 2000.

Jean-Lou Rihon, a director at PPM, said: “Moliflor represents an excellent example of a successful buy-and-build strategy an area in which PPM Ventures has a solid track record. Equally, the success of this transaction is due to a large extent to the management team’s high level of professionalism.”

Following the sale, LGV funds will hold 50.1 per cent of the group, RBPE will take a 48.2 per cent stake and Moliflor’s management will hold the balance of 1.7 per cent. The deal represents LGV’s third buy & build investment in France and its fifth deal since it started investing in France in 1997. Adrian Johnson, chief executive at LGV, said: “Moliflor is a great buy and build opportunity for LGV in a sector where a considerable amount of consolidation is taking place. The French casinos business has strong prospects and the growth of the leisure sector in France looks set to continue.”