Praesepe to acquire 26 adult gaming centres and 6 bingo clubs in the UK

Praesepe to acquire 26 AGCs and six bingo clubs in the UK - Regulatory Release

Diversifies portfolio, acquires world’s largest bingo club

Praesepe plc (AIM:PRA) is pleased to announce that it has agreed the conditional acquisition of Beacon Entertainments Limited, one of the largest AGC and bingo club operators in the UK, for a purchase price of £5.0 million (excluding transaction costs) along with assuming £40.0 million of bank loans.

Transaction Highlights:

• The Acquisition adds 26 Adult Gaming Centres ("AGCs") and six bingo clubs to Praesepe's UK portfolio 
• Further delivers Praesepe's strategy to build a diversified gaming group by expanding its AGC estate geographically and entering the mainstream bingo club market
• Brings one of the UK's most prestigious bingo clubs, the Beacon Club in Cricklewood, London, into Praesepe's estate
• The Target generated turnover of £35.9 million and operating profit before depreciation, amortisation and non-recurring costs of £5.4 million in the 56 weeks ended 26 April 2009
• The Acquisition is expected to start generating significant synergies within the six months following completion, and will be fully realised in the year ending 31 December 2011. Synergies once fully realised, will amount to approximately £2.0 million per year
• Praesepe will pay £5.0 million through a combination of consideration shares and cash and will additionally grant warrants to the sellers
• Praesepe will assume the £40.0 million bank facility currently available to the Target which will be extended for five years
• Brian Mattingley, currently Executive Chairman of Beacon, to join the Praesepe Board

Beacon offers a strong growth platform with proven assets

The Beacon business operates 26 AGC venues under the 'Showboat' brand, and six bingo clubs under the 'Beacon Bingo' brand. This includes the Beacon Club in Cricklewood, one of the UK's most prestigious bingo clubs. Beacon has its administrative headquarters in Loughborough, Leicestershire and employs 500 staff. 

Beacon underwent a financial restructuring in April 2009 involving a debt for equity swap that left it in a stronger financial and operational position. The sellers comprise eight institutions (who directly or via connected parties have provided debt and/or equity funding to the Target) and three members of the Target's management team. 

The UK bingo market has a market value of £1.7 billion and grew 4.6% year on year in the UK in the year ended 31 March 2009.

Brian Mattingley has extensive experience of the UK gaming sector, having held senior positions at Gala Coral Group and served as Chief Executive of Ritz Bingo Ltd. He has been a non-executive director of 888 Holdings PLC since March 2006. He will be a substantial addition to the Praesepe Board, which he will join as an Executive Director on Completion with a focus on business development. He will initially concentrate on integrating Beacon.

Key Terms of Acquisition
 

• £5.0 million payable by the issue of up to 66,666,667 consideration shares issued at 7.5p per share and the payment of up to £272,500 in cash. In addition the sellers will be granted up to 30,000,000 warrants. Any payment of up to £272,500 in cash will reduce the number of Consideration shares and warrants to be issued
• The Acquisition is conditional upon the £40.0 million bank facility currently available to the Target and £2.0 million of the bank facilities currently available to Praesepe being extended for a five year term. The rest of the bank facility currently available to the Company of £3.8 million is intended to be repaid prior to Completion
• The Acquisition qualifies as a reverse acquisition under AIM Rules; re-admission of the Enlarged Group (including admission of the consideration shares) is expected on 20 April 2010
• The Acquisition is conditional upon, inter alia, shareholder approval, which will be sought at the General Meeting of the Company to be held at 10.00am on 19 April 2010 at the offices of Jones Day at 21 Tudor Street, London EC4Y 0DJ
• Since Praesepe announced, on 12 February 2010, that it was undertaking a £6.0 million placing and contemplating a reverse acquisition, trading in its shares has been suspended. This suspension has been lifted today following the publication of the Admission Document. As a result, the 80 million placing shares placed with investors to fund the Acquisition are expected to be admitted to trading on 31 March 2010
• The Admission Document is available on the Company's website (www.praesepeplc.com) and is being sent to all Shareholders

To read the full release you can either visit the London Stock Exchange or download the PDF document by clicking on the icon below:

29/beacon_entertainments_ltd.pdf 

Enquiries:
Praesepe plc
Nick Harding, Chief Executive Officer
Matthew Proctor, Chief Financial Officer
Tel: +44 (0) 7970 148 000
Tel: +44 (0) 7985 116 578
 
Oriel Securities Limited (Nominated Adviser and Broker)
Emma Griffin
Natalie Fortescue
Gareth Price
Tel: +44 (0)20 7710 7600
 
Brunswick
Chris Blundell
Tel: +44 (0)20 7404 5959