Epiris announces £266 million IPO of Hollywood Bowl Group plc

POSTED 16 September 2016

Epiris is pleased to announce the successful initial public offering (“IPO”) of its portfolio company Hollywood Bowl Group plc (“Hollywood Bowl”), the UK’s largest ten-pin bowling operator. Upon admission of its shares to the Main Market of the London Stock Exchange on 21 September 2016, Hollywood Bowl will have a market capitalisation of £240 million.

Based on the offer price, Electra Private Equity PLC’s (“Electra”) equity and debt investments in Hollywood Bowl have a value of £217million, an uplift of £62 million on the valuation at 31 March 2016 and equivalent to an increase in Electra’s NAV of 126 pence per share.

On admission, Electra is expected to receive cash proceeds of £153 million from the sale of its equity investment as well as the repayment of £22 million of debt instruments issued by Hollywood Bowl. In addition, Electra will hold approximately 18% of the issued ordinary share capital of Hollywood Bowl with a valuation at the offer price of £42 million; these shares are subject to a six-month lock-up.  The total equity return for Electra is 3.1x in cash plus a further 0.8x in shares, totalling 3.9x and an IRR of over 90%.

Hollywood Bowl Group, formerly known as The Original Bowling Company, is the UK’s largest ten-pin bowling operator, with a portfolio of 54 centres operating across the UK under the Hollywood Bowl, AMF and Bowlplex brands. The group specialises in operating large, high quality bowling centres, designed to offer a complete family entertainment experience with each centre offering at least 16 bowling lanes, on-site dining, licensed bars, and state-of-the-art family games arcades.

Bill Priestley, Chief Investment Partner at Epiris, said:

“This investment is a great example of Epiris’ investment strategy in action. When we first invested two years ago our plan was to accelerate the company’s growth and, together with Steve Burns and his team, this is exactly what we have done: bringing forward and expanding the company’s organic growth investment programme, developing the new site pipeline, and leading the acquisition of Bowlplex. Altogether these actions have more than doubled the size of the business while transforming it into the UK market leader with multiple levers for future growth.”

Steve Burns, CEO of Hollywood Bowl Group, said:

“Epiris have been a fantastic investor for Hollywood Bowl, with their support we have achieved a huge amount over the past few years, continuing to transform the business through investment and acquisition, and providing outstanding family entertainment to millions of customers every year. Keeping the customer experience at the heart of everything we do, we have exciting plans in place to grow the business further in the years ahead.”

Bill Priestley and Ian Wood are responsible for the investment and exit of Hollywood Bowl.

Investec Bank plc acted as Sole Sponsor, Financial Adviser, Bookrunner and Broker in relation to the Offer and Admission.

This continues a busy year for Electra, which including today’s announcement has seen realisations or agreements to sell of nearly £900 million and new investments of over £200 million. Realisations announced since October include the agreement to sell Elian, the exits of Daler-Rowney, Kalle, MIMS and Zensar Technologies, the partial realisation of Allflex, and the proceeds from the refinancing of the Park Resorts Group at the time of its merger with Parkdean Holidays. New investments include the buyouts of Photobox Group and Retirement Bridge Group and investments in two CLOs.

Epiris refers to Epiris LLP acting on behalf of its client Electra Private Equity PLC.

Ends

For further information please contact:

Andrew Honnor, Matthew Goodman, Matthieu Roussellier, Greenbrook Communications
+44 (0)20 7952 2000

Nicholas Board and Andrew Kenny, Epiris
+44 (0)20 7306 3902

Note to Editors:

About Electra Private Equity PLC’s investment in Hollywood Bowl plc
In September 2014 Electra made a £50 million equity investment in the £91 million management buyout of The Original Bowling Company. In December 2015 Electra invested a further £10 million by way of a mezzanine loan to finance the acquisition of Bowlplex and later in the same month Electra invested £11 million to pre-emptively acquire a portion of Hollywood Bowl’s senior debt at a discount to par, from one of its lenders who was exiting the senior debt market.

About Epiris LLP
Epiris is an independent private equity fund manager with over 25 years' experience. During this time it has invested in excess of £4.7 billion in over 200 deals. As at 31 March 2016, the firm had funds under management of
£2 billion.

Epiris’ flexible investment strategy allows it to invest broadly across the private equity market with a particular focus on Buyouts and Co-investments, Secondaries and Debt.

The firm's major client is Electra Private Equity PLC (“Electra”), a private equity investment trust which has been listed on the London Stock Exchange since 1976. Electra’s long-term investment performance has been consistently superior to private equity and other benchmarks. Over the ten years to 31 March 2016, Electra has seen diluted NAV per share growth of 228%. This is more than seven times the NAV per share return of the Morningstar Private Equity Index (ex. Electra). It is also equivalent to a ten-year annualised return of 13%, in the upper part of Electra’s target range of 10-15% over the long-term.

For further information please visit www.electrapartners.com.

Epiris LLP is authorised and regulated by the Financial Conduct Authority.

About Hollywood Bowl Group
Hollywood Bowl Group is the UK’s largest ten-pin bowling operator, with a portfolio of 54 Centres operating across the UK under the Hollywood Bowl, AMF and Bowlplex brands. The Group specialises in operating large, high quality bowling centres, predominantly located in out of town multi-use leisure parks (typically co-located with cinema and casual dining sites) and large retail parks with all of the Centres being occupied by the Group on a leasehold basis. The Centres are designed to offer a complete family entertainment experience with each Centre offering at least 16 bowling lanes, on-site dining, licensed bars, and state-of-the-art family games arcades.