Luke Johnson's latest media play
Beyond the Multiplex - games and cinema combos are all the rage
Hello Rainmakers,
Welcome to our Friday whizz through some key themes in M&A.
Mad October seems to be continuing apace.
Applied Nutrition formally announced their float on Monday, a process doubtless brought forward by the looming tax hike everyone is expecting in the Budget.
THG moved on with plans to take Ingenuity private, with an oversubscribed placing way over the £75m Matt Moulding called for.
Also, Mike Ashley’s Frasers has invested £10m in the remaining THG PLC.
Luke Johnson back in the media game
Experienced leisure entrepreneur Luke Johnson has headed up a buy-out of independent cinema chain The Light.
Johnson and his private equity firm Risk Capital Partners have set out an ambitious growth plan, backed by a restructured banking facility. They want the business to double in size over the next two years and claim £15m will be invested. Renowned cinema and leisure investor Melcorpo also has an undisclosed stake in the business
The Light, which has 13 venues across the UK has developed a unique entertainment model which includes bowling, mini golf, interactive darts, climbing and karaoke in addition to its core cinema offering. It was previously backed by Connection Capital.
Johnson said: “I have spent 40 years building businesses in the leisure and hospitality sectors, ranging from Pizza Express to Gail’s.
“We think the combination of cinema together with competitive socialising is a compelling offer for both consumers and landlords and believe the disruption facing the cinema industry provides opportunities.”
It has been a busy time for Johnson, who was chairman of Patisserie Valley in 2019 when arrests were made by the Serious Fraud Office. Last month he became chairman of struggling bar chain Revolution, which he has a 20% stake in and this week said it was changing its name to Revel Collective.
Johnson is best known as the former owner of Pizza Express, and currently the owner of Gail’s Bakery. He is also an investor in Kelso, the activist investor in THG.
A former chairman of Channel 4 TV, he has been involved as a director/owner of various quoted companies in retailing, pubs and bars, parcel delivery and maritime commerce, including Whittard of Chelsea, My Kinda Town, Nightfreight, Topps Tiles and American Port Services.
For context, across the UK there are pockets of characterful local cinemas, art house and more mainstream, that are offering discerning cinema goers something different from what had become a soulless and wallet sapping exercise.
The Light model is similar to that of Everyman Media, an AIM-listed business with 38 cinemas which has enjoyed decent revenue growth of 23 per cent to reach £46.9m in the first half of 2024 as admissions rose by 20 per cent year on year.
Everyman’s business model relies on customers seeing the cinema as a hospitality experience, with movie-goers paying for comfort and premium meals with their films.
At a time when Cineworld is in bankruptcy in the US and rival multiple Vue is restructuring, Everyman took £78.8m in the box office, turning a profit of £402,000, up from the prior year’s operating loss of £2.2m on 3.4m admissions.
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LDC HEADS FOR THE EXIT DOOR
LDC's East Midlands team continues to show its guile. This week it revealed it has exited fast-growing Nottingham-based software firm ENSEK.
Centrica has snapped up the company, which just a few weeks ago acquired Zoa in a deal which saw the company increase its headcount to 550.
LDC originally backed the management buyout of the business, led by CEO Jon Slade, in 2017, providing capital to support its new product development and growth plans.
This deal has been some time in the making; Centrica first partnered with ENSEK in August 2021. They liked it so much, they bought the company.
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PACKAGED UP
Global paper and packaging giant Mondi has just snapped up Schumacher Packaging’s Western European assets in a £532m deal.
With seven corrugated plants, two solid board mills and four converting plants across Germany, Benelux, and the UK, they’re adding over 1bn sq m of capacity to Mondi’s European footprint.
Schumacher’s Birmingham site stays in the game and co-CEOs Bjoern and Hendrik are sticking around to steer the ship as strategic adviser and COO of Solid Board.
Looks like the packaging giant is ready to box up Europe.
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ON RAINMAKERS THIS WEEK
Our Rainmakers this week sees us talking to a couple of leading advisers, Peter Terry and Matt Bryden-Smith from Grant Thornton, who’ve been the eye of the storms raging through the regional market in the last few years.
We cover the Applied Nutrition story, where they played a key part, the departure of Deloitte from the regions, and Terry’s decision to stick rather than twist when a new opportunity popped up.
But first, there’s the story of their latest big deal, the sale of aggregates business Fox on the same day that it made three acquisitions.
Fox, under its fourth generation of family leadership and has been in operation since 1932, was acquired by American private equity firm, Stellex Capital Management, while also acquiring three businesses, including J A Jackson, a quarry operator and producer of recycled aggregates and ready mixed concrete.
Terry, who looks refreshed and content, has also just been promoted to be national head of private equity at Grant Thornton, alongside his role as head of corporate finance for the North.
A link to the piece is here.
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MELISSA SNOVER OPENS UP TO RAINMAKERS
We brought you a deep dive into Rem3dy Health Group, one of the UK’s most exciting entrepreneurial businesses, run by Melissa Snover, one of the UK’s most exciting entrepreneurs.
She claims the record for the largest seed round raised by a female founder in the UK followed by a massively-oversubscribed Series A round, which resulted in early investors making “a lot of money in a very short space of time”.
It’s a fascinating insight into the processes of fund raising and sheer energy required from our conversation with Melissa Snover, who has 27 patents which can personalise and potentially transform medication, by enabling 3D printing of medicine on site in hospitals and pharmacies.
Check it out.
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EVENT HORIZON
The North West’s corporate finance community joined us at Squire Patton Boggs‘ offices yesterday (Tuesday 8 October) for our latest Rainmakers Seminar, which explored the challenge of becoming deal-ready for 2025.
Chaired by TheBusinessDesk.com‘s North West editor Michael Taylor, we started by hearing insights and contributions from the winners of 2024’s Rainmaker Awards – Nicola Merritt and Catriona Lang.
The panel was then joined by Matthew Hodgson of Claritas Tax and Giles Chesher to further discuss where the deals are going to come from in the year ahead, with a special focus on likely tax changes and strategies from Matt ahead of the UK Budget in late October.
Catriona Lang said: “It was a genuine honour to be asked to speak at this event in front of an audience of my respected peers in the M&A community. A big thank you to Michael Taylor and the Business Desk team, both for asking me and for putting on a great event as always.”
Matt Hodgson said: “Thank you Michael Taylor and TheBusinessDesk.com for inviting me and apologies I couldn’t bring a brighter message right now in terms of what’s coming in the Budget. Whatever happens, there will still be deals to be done!”
Thank you to everyone who joined us for a packed event and thanks to our sponsors Claritas Tax & Squire Patton Boggs and event partner Campaigner.
So save the date for Rainmakers 2025 – Wednesday 26 March, 2025 – and secure your place today at The Point, Emirates Old Trafford, Manchester.
The first Rainmakers Conference this March sold out, with more than 400 people attending to hear the insights and perspectives from entrepreneurs, investors and advisors, and to network with senior figures from across the corporate finance community.
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