Permira to Buy Gala Holdings Stake

23 Aug 2005

Permira Advisers Ltd., a U.K. buyout fund, will purchase a stake in Gala Group Holdings Plc in a transaction valuing the casino and bingo-hall operator at 1.89 billion pounds ($3.39 billion).

Permira will invest about 200 million pounds to become a joint owner of Nottingham, England-based Gala with Candover Investments Plc and Cinven Ltd. Gala's debt will be "completely refinanced as part of the deal," Chairman John Kelly said today in an interview. The company's sales are up 6 to 7 percent in the first 11 months of this year, and sees no sign of declining consumer spending. Candover and Cinven bought Gala in February 2003, valuing the operator of 30 casinos and 166 bingo clubs at 1.24 billion pounds, the statement shows. The company had earnings before interest, taxes and amortization of 145.8 million pounds last year.

Gala decided against selling shares to the public immediately in an initial public offering because the Permira investment offered a higher valuation to existing shareholders, Kelly said. An eventual IPO of the company is "inevitable," he said. The refinancing will allow Gala to expand in the industry, he said.

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