Ontario Teachers' wins lottery operator Camelot in £389m deal

After a year-long sale process, Canadian investor Ontario Teachers' Pension Plan has agreed to purchase the UK national lottery operator Camelot in a £389m deal.

The company, currently co-owned by Cadbury, De La Rue, Fujitsu, Thales and Royal Mail, has been running the UK's National Lottery since it began in 1994. Last year, Camelot was given a 10-year license to run the Lottery with an option to extend for another five more years - its third stint as operator.

The move by Teachers' is a sign that private equity firms increasingly need to be on watch for LPs looking to compete with GPs and bulk up their direct investment activities. The deal follows Teachers' Acorn Care & Education transaction, where the investor acquired the company from Phoenix in a deal reportedly worth £150m.

The Camelot deal saw Teachers' stave off competition from private equity firm CVC. It is understood that Teachers', as a long-term investor, is looking to work with management to help expand the business into overseas markets as well as new markets inside the UK. A reported £60m of additional working capital has been set aside for future expansion.

Despite the recession, the company has performed rather well recently, mainly due to the growing number of people choosing to play online or via their mobile phones.

Greenhill and Rothschild ran the sale process for Camelot. The National Lottery Commission has yet to clear the transaction.

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• Topics
• Buyouts
• UK / Ireland
• Consumer
• LPs
• CVC Capital Partners