Close Brothers Private Equity (“CBPE”) today announces the management buy-out of Luminar’s Enterprise division comprising 49 nightclubs and high street bars to create the UK’s second largest independent nightclub operator. The total consideration for the transaction is £28 million and the new business will be renamed CanDu Entertainment Group Ltd (“CanDu”). Luminar plc is selling the Enterprise division to focus on its core business.

CanDu will comprise 29 nightclubs and 20 high street bars across the UK, including 13 freehold sites. In the year to 27 February 2005, the division generated sales of £44.1 million and site EBITDA of £9.4 million. The nightclubs and high street bars are located predominantly in regional towns.

Some of CBPE’s funding will be used to invest across the CanDu estate, including the repositioning of some of the high street bars, as well as increasing local marketing initiatives. In addition, CBPE will be actively looking at acquisitions for the nightclub estate.

The CanDu management buy-out will be led by Tim Roberts, Chief Executive; Craig Grant, Finance Director; and Peter Loader, Operations Executive. They all have considerable experience in the leisure sector. Tim Roberts has worked at Luminar plc for 13 years, managing the Enterprise division for over a year. Craig Grant was formerly Head of Strategy & Planning at Luminar plc and held similar roles at Inter Continental Hotels and Bass. Peter Loader was previously Managing Director of Luminar’s Entertainments division and has spent 25 years working in the leisure industry, primarily at nightclubs, at First Leisure and Rank Leisure.

Commenting on the transaction, Sean Dinnen, partner at CBPE, said:

“CanDu is a highly cash generative business. We believe that we can improve a number of the existing sites through investment and focused management and marketing at a local level. We will also look to expand the business with bolt-on acquisitions. The CanDu management team has considerable experience and is capable of managing an enlarged estate.”

Tim Roberts, Chief Executive of CanDu, added:

“We intend to focus on entertainment in our venues and improving the overall experience for customers to drive revenues and profitability. The UK nightclub market is currently unconsolidated with a significant number of nightclubs in private ownership. We believe this presents opportunities to grow the CanDu estate, in particular, using the management buy-out as a platform to develop and grow a strong national nightclub business.”

CBPE’s most recent transaction in the leisure sector was its investment in Park Resorts, the caravan park operator, which was recently sold achieving a 7.6 times multiple on invested capital.

The advisors on this transaction for CanDu were PKF (financial advisor), Deloittes (financial due diligence) Osborne Clarke (legal) and Fleurets (surveyors).

-Ends-

For more information contact:

Close Brothers 020 7065 1100
Private Equity
Sean Dinnen 020 7065 1132
Ben Alexander 020 7065 1136