New York-headquartered The Blackstone Group has agreed to acquire the UK assets of French cinema group UGC in a transaction worth around £200 million (€290 million; $385 million.
The combination of UGC and Cine-UK, which Blackstone acquired in October for £120 million, will create the second largest cinema group in Britain with over 750 screens and almost 25 percent of the market.
UGC is Europe’s largest cinema chain and is owned by French media conglomerate Vivendi Universal and members of France’s Verrechia family.
The largest cinema group in the UK is also in the hands of private equity backers. It was created in September this year when London-headquartered Terra Firma Capital Partners acquired cinema chains Odeon and UCI for around £580 million.
Following the UCG transaction, the majority of the UK cinema market is now backed by private equity firms. The other major player is Vue Cinemas, which is owned by a consortium comprised of Legal & General Ventures, Clarity Partners and Boston Ventures.
The cinema sector is attractive to private equity firms due to its property assets and regular, stable cash flows.
The transaction is Blackstone’s second major transaction this week, following the £563.5 million takeover of London-listed Nursing Home Properties (NHP) on Monday.
Following completion of that deal, Blackstone intends to merge Highfield Care with Southern Cross, the rival UK nursing home operator acquired by Blackstone from West Private Equity for £160 million in September 2004.