Brighton Pier Group – the Luke Johnson-chaired owner of Eclectic Bars – has agreed to acquire Lethington Leisure Ltd – operator of six Paradise Island Adventure Golf sites, for £10.5m.
The company announced this morning that it would part fund the acquisition through the placing of new ordinary shares, to raise £3m. Johnson said he intends to subscribe for £850,000 of the shares before the placing.
The balance is to be funded through an extension to the group’s existing banking facilities with Barclays, the issue of £600,000 of consideration shares in Brighton Pier Group to some shareholders of Lethington and £1m cash payment, deferred by one year by way of loan notes, to the remaining shareholders. There is additional deferred consideration of up to £100,000 payable dependent on trading in the period to 30 June 2018.
Johnson said “a number of potential additional locations” had already been identified.
The announcement did not include any comment on trading in the rest of the Brighton Pier Group business, other than to say it was in line with management’s expectations.
Johnson said: “It is part of The Brighton Pier Group’s strategy to acquire growing experiential leisure and entertainment destinations. Paradise Island Adventure Golf operates in the growing social competition leisure sector in UK. Such facilities are known drivers of footfall as retail and leisure centres look to provide affordable entertainment for families and friends, which complement their retail and food offerings.
“We are excited by the opportunity to bring Paradise Island Adventure Golf into the group and will now turn our attention to expanding its footprint across the UK, having already identified a number of potential additional locations.”
There are Paradise Island Adventure Golf sites in Glasgow (opened in 2006), Manchester (opened in 2008), Sheffield (opened in 2012), Livingston (opened in 2012), Cheshire Oaks (opened in 2015) and Derby (opened in 2017). Each site has two unique 18 hole courses.
Lethington Leisure recorded revenue of £3.49m in the financial year ended 31 March 2017, with an adjusted EBITDA of £1.21m. Between the financial years ended 31 March 2014 and 2017, the company produced a Compound Annual Growth Rate of 14.7%. Revenue in the first half of the financial year ending 31 March 2018 was ahead of budget by 7%.