PE-backed Coral to merge with Ladbrokes

The deal will lead to the creation of a listed group valued at £2.3bn, although it is expected to come under scrutiny from the competition authorities as the enlarged group would become the largest UK high-street betting business.

A consortium of investors including Apollo Management, Cerberus and Park Square made a £200m equity investment in Coral in 2010, as part of a restructuring deal that saw them take control of the company. The investors swapped £558m of debt for equity to become the new owners of Gala Coral, while previous private equity backers Candover, Cinven and Permira exited the company.

The previous private equity backers were understood at the time to have lost most of their £1.2bn original investment, with Permira writing down £370m, while Candover and Cinven each lost £150m. The new owners had first invested in the company as mezzanine backers in January 2010, as the company struggled to refinance about £2.5bn worth of debt.

The current deal would see Ladbrokes issuing new ordinary shares to the existing shareholders of Coral (representing 48.25% of the enlarged group), while existing Ladbrokes shareholders would own 51.75% of the combined business.

The group would generate £2.1bn in revenues, with EBITDA standing at £392m.

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• Topics
• Exits
• UK / Ireland
• Consumer
• United Kingdom
• Partial sale
• Apollo Management