Electra's Hollywood Bowl to float with £240m market cap

Kenny Wastell
16 September 2016

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Electra Partners-backed tenpin bowling operator Hollywood Bowl has priced its upcoming IPO on the London Stock Exchange, giving the business a market cap of ТЃ240m.

Electra is expected to receive gross proceeds of £153m, based on the partial sale of its stake and the repayment of a £22m debt facility. This equates to a 3.1x cash return and a 3.9x total return taking into account its remaining stake in the business, equivalent to an IRR of more than 90%.

The offering sees Hollywood Bowl's shares priced at 160 pence apiece and would value Electra's pre-IPO equity and debt investments in the business at £217m.

Following the process, Electra will retain 17.8% of Hollywood Bowl's shares with a total value of £42m, subject to a six-month lock-up period. The management team will hold a 5.4% stake.

The business announced its intention to float in June, though at the time it anticipated the process would take place in July.

Under Electra's tenure, Hollywood Bowl has expanded by investing in new sites and, most recently, bolting on competitor Bowlplex last year.

Investec is acting as sole sponsor, financial adviser, bookrunner and broker in the IPO process.

Previous funding
In 2010, CBPE Capital backed AMF Bowling's acquisition of Hollywood Bowl, taking a minority stake in the company through a £20m investment.

Electra acquired the business from CBPE in a deal valued at £91m in 2014, investing £51m of equity in the transaction, alongside the company's management. GE, Barclays and Lloyds provided debt facilities to support the transaction.

Listed entity Electra Private Equity deployed a further £10m to finance the Bowlplex purchase in 2015. Around the same time, Electra invested a further £11m to pre-emptively acquire a portion of the company's senior debt at a discount to par from one of its lenders.

Company
Founded in 2010 and headquartered in Hemel Hempstead, Hollywood Bowl comprises 54 bowling centres across the UK and has a total headcount of 1,950.

In the financial year ending September 2015, the business generated a turnover of £86m with adjusted EBITDA of £20.6m, up from £78.7m and £14.6m respectively in the previous 12 months.

People
Electra Partners – Bill Priestley (chief investment partner); Ian Wood (investment director).
Hollywood Bowl – Steve Burns (CEO).