|RAL Holdings, the amusement arcade operator chaired by former Spurs chairman Nat Solomon is to be acquired by PPM, the private equity arm of the Prudential, in a £40 million management buyout. |
The company, a £26 million buyout from Rank Group in 1996, has been seeking a buyer since October so that it can access the necessary capital to take advantage of the Government’s planned gaming deregulation through moves into areas such as bingo and casinos.
RAL’s management team will retain a stake of 15 per cent in the business, which this year is expected to deliver earnings before interest, tax, depreciation and amortisation of £6.4 million from turnover of about £30 million. Debt and mezzanine funding is being provided by HBOS. RAL, which has previously looked at a stock market listing, operates 135 amusement arcades trading under the Quicksilver brand that focus on adult slot machine players. It is the biggest operator in the UK, commanding a 14 per cent market share and operating about 5,500 slot machines.
It recently became the first such operator to open an outlet devoted to fixed-odds betting terminals (FOBTs), an internet-based form of betting that has helped to transform the fortunes of big bookmakers such as Ladbrokes and William Hill. It won a licence to operate FOBTs in the face of stiff opposition from the bookies.
After the success of its FOBT-based site in Camden, North London, RAL is believed to be seeking licences for up to 20 further sites.