Greenhill Capital Partners Europe has completed its first deal since closing its first fund this year with the acquisition of Rileys, a snooker and pool club operator, for £30.5 million (€45.2 million; $61.8 million)
GCPE, the European buyout arm of the US boutique investment bank, has teamed up with UK-based fund manager JO Hambro Capital Management to do the deal, with both firms taking an equal stake.
Rileys is the biggest operator of snooker halls in the UK, with more than 150 sites nationwide. The private member clubs also serve food and drink and offer gaming facilities, including poker. The company, which was previously owned by UK-listed leisure group Georgica, had earnings of £9.5 million last year on revenues of £58.2 million, although Georgica warned that profits were likely to be hit this year by the recently introduced smoking ban.
As part of the deal, Georgica also agreed a sale and leaseback of property assets worth £28 million, taking its total consideration to £62.1 million. The listed company will also retain eight properties from the Rileys group to redevelop or sell.
Georgica said today it had also received takeover approaches for the whole business following the sale of Rileys, which is likely to close at the end of August.
Its new owners plan to build the company by opening more clubs, both organically and through acquisitions, while simultaneously redeveloping some of the existing sites. The current management team will remain with the business, and are understood to be lining up their first acquisition already.
GCPE closed its first European fund in May with £106 million of commitments, which includes a £25 million contribution from its US parent. There was also a £39.5 million commitment from Greenhill’s managing directors, with the remaining 39 percent coming from third-party investors. This is the firm’s first deal since then, although the Europe fund has previously invested in the buyout of insurer Ironsure, made from the US fund.
Globally, the firm’s buyout arm now manages $1.3 billion. It focuses on smaller mid-market deals to avoid conflicts of interest with its parent bank’s advisory business, which operates at the larger end of the market.