Doughty Hanson & Co, one of the largest independent private equity firms in Europe, today announced that it is to acquire Vue Entertainment (“Vue”), one of the UK’s leading developers and operators of state-of-the-art multiplex cinemas from Cavendish Square Partners, affiliated investment funds of Och-Ziff Capital Management Group and the existing management team. The Vue management team, including Tim Richards (CEO) who established the company, will be reinvesting in the transaction.
Vue has the third largest market share in the UK in terms of box office via its 68 cinemas and 678 screens. The company also runs 2 cinemas internationally. In recent years, Vue has led the way in new cinema development in the UK and 50% of all new multiplex cinemas built nationwide in the past couple of years have been a Vue multiplex. The most recent openings include the all-digital Vue Westfield cinema in London which has broken records as the highest grossing cinema in the country.
Cinema visits rank as one of the UK’s most popular paid for out of home entertainment activities for people of all ages. Cinema attendance has grown year on year, even against the backdrop of the economic downturn. UK box office revenues were up 11% in 2009 and UK admissions were up 6%. Future growth is expected to be driven though a number of areas, including digital 3D films which are increasing in popularity and are set to represent around 30% of the box office next year.
In addition, the roll-out of digital projection will deliver a wider choice of content and greater flexibility in programming, helping to drive attendance alongside the strong slate of movies already scheduled for 2011 and beyond. Vue has recently announced that it will be working with Sony Digital Europe on the rollout of 4K projectors across Vue’s cinema portfolio, which is set to be completed by 2012.
Julian Huxtable, Senior Principal at Doughty Hanson said today: “Vue Entertainment is a great company led by an exceptional, highly experienced management team which has created a strong market position for the company with an exciting future ahead. Vue has an excellent reputation for its high quality customer experience and its innovative approach of developing and marketing new products and services designed to grow the business and customer base.
“The company has achieved consistent financial performance and has succeeded in growing through the recent recession. We believe that Vue offers a strong platform for growth and we are excited about working with Tim and his team on the next exciting chapter of the Vue story.”
Tim Richards, CEO of Vue Entertainment, said: “Doughty Hanson is an ideal partner for Vue, as it shares our vision of driving attractive growth and investment returns by consistently delivering an excellent entertainment experience for our customers.
“Vue has come a long way since it was launched in 2003 and this next phase of our journey with Doughty Hanson as our new partner is going to be very exciting. We will continue to innovate, enhance and grow the business. We will continue to open fantastic new state of the art cinemas such as the new 14 screen all digital Vue multiplex cinema in Westfield’s Stratford City which opens in September next year.”