LGV, RBPE buy Moliflor from PPM

Legal & General Ventures and Royal Bank Private Equity have acquired France’s fifth-largest casino operator in a secondary buyout.

UK-based private equity firms Legal & General Ventures and Royal Bank Private Equity have won the race to acquire French casino operator Moliflor Loisirs from its existing shareholders, PPM Ventures, for a price in excess of E400m. The pair clinched the deal amid competition from financial buyers including Candover and CVC Capital Partners. PPM Ventures acquired the casino operator in June 1999 for around E80m. 

On completion of the transaction, LGV funds will hold 50.1 per cent of the equity, RBPE 48.2 per cent and Moliflor's management will hold the balance of 1.7 per cent.  

The French casino market is the largest in Europe with 170 casinos accounting for E2.3bn in gross gaming revenues in 2000. “The French casinos business has strong prospects and the growth of the leisure sector in France looks set to continue,' explained Adrian Johnson, chief executive at LGV.

Moliflor is the fifth largest casino operator in France, the largest market in Europe with an annual gross gaming revenue of E2.3bn. Johnson siad that the new owners would be looking to turn Moliflor into a top three casino operator through a buy-and-build strategy in France, adding: “The French gaming industry is a sector we have been looking at for quite some time. We believe there is considerable scope for consolidation in the casino market and we intend to play an integral role in this. The deal continues our strategy of acquiring well-established companies with strong cashflows.” 

This deal represents LGV's third buy & build investment in France and fifth French deal since it started investing in France in 1997. Buy-and-builds represent half of LGV's deals in Europe since 1990.  

LGV and RBPE received legal advice from Parisian law firm Wilkie Farr. Financial advice and due diligence was provided by PriceWaterhouse Coopers. For RBPE, it is second investment in the French market; the first was completed in June 2001 with the purchase of Metaux Speciaux SA.

Legal & General Ventures has £550m under management. Its investment focus is on backing management teams in European buyouts and buy-ins of well established businesses with attractive market positions and strong cashflows. Typically these investments would have an initial enterprise value in excess of E75m.