Boston, LGV buy Warner Village

The two firms have bought the UK operations of cinema group Warner Village in a deal valued at around £225m.

Legal & General Ventures (LGV) and US-based Boston Ventures have continued the ongoing consolidation of the UK’s cinema market with the acquisition of the UK operations of the Warner Village Cinema Group.

 

The two firms have agreed to pay around £225m for the business, which will be merged with SBC International Cinemas, the small UK chain which was acquired by Boston Ventures in 1998. The purchase of 36 Warner Village sites nationwide boosts its number of multiplex cinemas from six to 42 with a total of 384 screens. The expanded company, which will be renamed Vue, becomes the second biggest cinema operator in the UK.

 

Boston Ventures is providing significant additional funding for the transaction and is joined as equal partners by Legal & General Ventures and US-based Clarity Partners, which specialises in communications, media and related technology investments. CIBC World Markets provided the debt financing for the acquisition. Barry Baker, Barbara Ginader and Vikrant Raina of Boston Ventures will join the new company’s board.

 

LGV follows WestLB into the cinema business, following the latter’s acquisition of the Odeon chain of cinemas from Cinven in a deal worth £430m. Odeon is the largest chain in the UK, with more than 130 sites across the country.

 

In France, LBO France and CDC Ixis Equity Capital are currently competing to acquire UGC, Europe’s largest cinema chain which is 58 per cent owned by Vivendi Universal. Vivendi is trying to sell its stake for up to E500m.

 

Private equity firms have been drawn to the sector because of a sustained period of growth in cinema audiences, coupled with the steady cashflows that the sector generates. Boston Ventures’ Barry Baker said: “With cinema attendance expected to rise in the UK year on year, we look forward to exceptional growth for Vue Cinemas.”