Whitbread sells David Lloyd Leisure for £925m
04/06/2007
Whitbread PLC has announced that it has conditionally agreed to sell David Lloyd Leisure to Versailles Bidco Limited, a company owned by London & Regional Holdings Limited and Bank of Scotland Corporate, for £925m.
The aggreement is for an aggregate cash consideration, on a debt and cash free basis. The sale price represents a multiple of 13.4x historic EBITDA (based on DLL EBITDA for the year to 1 March 2007 of £68.8 million). Completion is expected to occur on 2 August 2007.
Whitbread will initially use the proceeds from the sale to pay down debt. Subsequently, in the absence of any further value creating opportunities and based on current investment plans, Whitbread will move to the level of leverage outlined in its preliminary results announcement on 24th April 2007. This will be achieved through returning any excess cash to Whitbread’s shareholders net of any further payments made into the company’s pension fund.
Commenting on the sale, Alan Parker, CEO of Whitbread said: “Following the success of the management action taken in DLL over the last eighteen months and a review of the health club market, we have decided that this sale represents excellent value for our shareholders. Whitbread is now well placed to deliver the ambitious growth plans for its hotels, restaurants and coffee shops."
