Brighton Pier Group buys Yorkshire-based Lightwater Valley
Leisure operator Brighton Pier Group has acquired the entire share capital of Lightwater Valley Attractions, it announced on Thursday, for consideration of up to £5m in cash.
The AIM-traded firm, which operates the Palace Pier in Brighton, East Sussex, as well as several miniature golf locations, said the acquisition would be funded from a £2m extension to its revolving credit facility, as well as existing cash resources.
It said the transaction was expected to be immediately earnings-accretive after completion.
The total consideration was being satisfied by an initial payment of £4m in cash on the completion date, adjusted for working capital and on a cash-free, debt-free basis, deferred consideration of £0.5m due at the end of October, and contingent consideration of up to a further £0.5m, subject to Lightwater Valley achieving certain trading targets over the current summer.
Lightwater Valley owns and operates the Lightwater Valley theme park in North Yorkshire, which is focussed on “family days out” and is set in 175 acres of landscaped parkland.
The park includes rides, amusements, crazy golf, children's outdoor and indoor play, entertainment shows, and numerous food, drink and retail outlets.
It also provides “popular” seasonal events including ‘Frightwater Valley’ at Halloween, and ‘Alice in Winterland’ at Christmas.
For its last full year of uninterrupted trading, being the 12 months ended 28 February 2019, Lightwater Valley recorded sales of £5.1m, EBITDA of £1.1m, and pre tax profits of £0.6m.
The financial year ended 28 February 2021 for Lightwater Valley was “heavily impacted” by restrictions on capacity, together with closures in relation to Covid-19.
In its latest statutory financial statements, the firm recorded a loss before tax of £0.6m on sales of £2.4m, while EBITDA before the write-off of intercompany loans was £0.4m.
The total fixed assets being acquired were stated in the balance sheet at £4.1m.
Brighton Pier Group said that as the restrictions imposed by the coronavirus pandemic on the UK leisure industry were gradually lifted, the board was confident that Lightwater Valley's trading would resume to “normalised levels” in the short term.
Its board said it believed the “extensive space” at Lightwater Valley provided a “long-term growth opportunity” for the group to develop and expand the park.
That acquisition executed on the company's stated strategy to create a growth group, operating across a wide variety of leisure and entertainment assets in the UK.
It was the company’s intention to position itself as a consolidator in the sector.
“I believe that we can develop Lightwater Valley into the premier amusement destination across Yorkshire and the surrounding areas,” said chief executive officer Anne Ackord.
“This acquisition continues the company's development as a consolidator within the leisure industry, and we are excited to explore further growth opportunities as they arise.”
Ackord said the two businesses were “ideally suited” to take advantage of pent-up demand as the UK lifted its restrictions.
“The booming 'staycation' market is going to significantly grow UK tourism over the coming months as international travel restrictions remain in place, providing a great opportunity over the summer for all the group's operations.”
At 1450 BST, shares in the Brighton Pier Group were up 1.85% at 55p.