Doughty Hanson has struck a deal to buy Vue Entertainment, the UK cinema chain with 68 outlets.
The London-based private equity firm is buying the company from Cavendish Square Partners, investment funds of US investment Och-Ziff Capital Management Group and the existing cinema management team.
In a statement, Doughty said cinema attendance had grown grown year-on-year, even against the backdrop of the economic downturn. UK box office revenues were up 11 percent in 2009 and UK admissions were up 6 percent, it added.
Vue, which was launched in 2003, is a significant player having the third largest market share in the UK. Half of all new multiplex cinemas in the past two years have been Vue venues.
The most recent openings include Vue Westfield cinema in London which has broken records as the highest grossing cinema in the country.
The deal values the cinema group at £450 million (€518 million; $729 million), a source with knowledge of the process confirmed.
Cavendish was created earlier this year with the backing of secondaries investor Coller Capital to acquire 40 private equity investments from Lloyds Banking Group in one of last year’s highest profile secondaries deals. The 40 investments – which include assets such as oil and gas contractor PSN and health and fitness chain David Lloyd – were inherited by the bank when it acquired Halifax Bank of Scotland.
Doughty reportedly beat a number of other private equity bidders to the asset, with BC Partners and Omers Private Equity in the running.