UK gambling firm Gala Coral has sold its 130 retail bingo clubs to private investment group Caledonia Investments.
In a press release on Monday, Gala Coral announced the sale of its Gala Bingo retail division to private trust Caledonia Investments for £241m. The acquisition is expected to be completed in 2 months, upon approval from the UK Gambling Commission.
Gala Coral will retain ownership of the Gala brand as well as the websites Galabingo.com and Galacasino.com while Simon Wykes will stay on as Gala Bingo retail CEO. Proceeds of the acquisition will be applied to partial redemption of its 2018 senior secured loan.
Gala Coral also noted that the sale is unrelated to Ladbrokes-Gala Coral merger as Gala Retail did not form part of the proposed merged entity.
Caledonia seeks to invest £25m to £100m in private companies “either on a majority or minority basis in situations where it believes there to be a good opportunity for building value over the longer term,” SkyNews reported.
Gala Bingo is an attractive investment as it has more than 30% share of the UK retail bingo market, operating a national estate of 130 clubs with about 1 million active users. It has also one of the longest unbroken runs of dividend increases on the London stock market.
“We are very pleased to have agreed the sale of Gala Retail, following a competitive process. The sale is another transformative step for Gala Coral Group, following the turnaround of the business over the past few years. We wish the Gala Retail team all the very best for the future and believe the business will continue to thrive under its new owners. Gala Coral Group remains focused on growing and developing our retail bookmaking and online businesses, and concluding the proposed merger with Ladbrokes,” said Gala Coral Chief Executive Carl Leaver.
“[Gala Bingo’s] defensive, enduring business model, which delivers strong cash generation and dividend yield, fit ideally with the investment criteria sought by Caledonia for its unquoted portfolio and complements our other assets in the unquoted pool. As with our other unquoted investments, Gala Bingo will pay an attractive yield from inception,” added Caledonia’s Head of Unquoted Investments Duncan Johnson.