The sale has delivered a 2.5x return and an IRR of 43% for Palatine.
The Runcorn based business, which currently employs over 700 staff, owns and operates 20,000 amusement and entertainment machines across over 1,700 sites in the UK. The firm partners with high profile names in the leisure sector across holiday parks, motorway services, bowling centres and airports, with clients including Bourne Leisure, Park Resorts, Parkdean, Moto, Welcome Break and Roadchef.
The company was established in 2013, following a management buyout backed by Palatine Private Equity, and has since grown exponentially, recently securing an extension on its contract with MOTO, the UK’s largest provider of motorway service areas.
The NOVOMATIC Group, founded in 1980, comprises affiliated companies in 50 countries and exports high-tech gaming equipment to more than 80 jurisdictions. The firm operates over 232,000 gaming machines across more than 1,500 group operations including casinos and betting shops, achieving a turnover of more than €3.8bn in 2014. In addition to its headquarters in Austria, the company has production facilities and research and development centres in Germany, Hungary, Poland, the Czech Republic and the UK.
With its specialism in family entertainment machines, the acquisition of Playnation provides NOVOMATIC with an opportunity to break into new markets, and expand its offering to the consumer across the EU. Playnation will now have access to the enormous client base at NOVOMATIC’s disposal, and can capitalise on growth opportunities both in the UK and overseas.
Beth Houghton, Investment Director at Palatine Private Equity, said: “Since our investment in Playnation we have seen the business achieve exceptional growth in the family entertainment sector, capitalising on the buoyant market conditions. With the business now at a point in its growth cycle where an international buyer can take it onto the next stage, NOVOMATIC is the perfect strategic partner to help achieve Playnation’s long term objectives. I have enjoyed working with Adam and the management team and wish them all the success for the future.”
Adam Hodges, CEO at Playnation, said: “Since building the business with Palatine in 2013, we have taken a firm hold of the sector and formed some strong partnerships across the UK with our clients. Having a private equity backer has given us the contacts and resources to develop a strong management team, and the potential for future growth is enormous. NOVOMATIC offers us a unique and exciting opportunity to break into new markets and establish the Playnation brand more widely in the coming years.”
Clearwater International, led by Managing Partner Phil Burns and director Rob Burden, advised the Playnation shareholders on the deal. This is the second time that Clearwater has worked with the business, advising on the management buyout in 2013. Gateley provided legal advice on the deal.