7 March 2002
Legal & General Ventures ("LGV"), one of Europe’s leading private equity firms together with Royal Bank Private Equity ("RBPE"), the private equity arm of The Royal Bank of Scotland, has acquired French casino operator Moliflor Loisirs ("Moliflor") from its existing shareholders, PPM Ventures for a price in excess of €400m.
Moliflor is the fifth largest casino operator in France with a network of 16 casinos throughout the country located mainly in medium sized towns: seven in the South West of France, five in Central and East regions, three in the West of France and one on the French Riviera. Previously restricted to wealthy people, casinos are now a place of leisure accessible to people of all ages, across the full socio-economic spectrum. Most of the customers are locally based and visit casinos regularly throughout the year.
Moliflor was created as a family business in 1948 and went public in 1998. Since its acquisition by PPM Ventures in June 1999, its network of casinos doubled and it is now one of the most profitable operators and has attained market share of over 8%. Further acquisitions are expected to follow and Moliflor is aiming to be one of the leading casino operators in France in the short term.
The French casino market is the largest in Europe with 170 casinos accounting for €2.3bn in gross gaming revenues ("GGR") in 2000 and has attractive prospects for further growth. The nature of the business and stringent regulatory environment offer good protection to incumbent players and scope for consolidation, providing Moliflor with the opportunity to grow its current business both organically and through acquisition.
Following this transaction, LGV funds will hold 50.1% of the equity, RBPE 48.2% and Moliflor’s management will hold the balance of 1.7%. The institutional shareholders will provide support for Moliflor’s continued growth through a combination of reinvestment of internally generated cash and further equity if appropriate.
