Number of private equity deals in leisure sector doubles in one year

The number of UK private equity deals in the leisure sector has more than doubled from 12 to 26 in the past year, research by global law firm Mayer Brown has revealed.

Private equity funds maximised the opportunity to acquire low-cost assets ahead of the sector’s full recovery from the pandemic, the research found.

According to Mayer Brown, turnaround funds have been especially keen to obtain leisure businesses that ‘stayed afloat’ at a discount to their net asset value, as they demonstrated enough resilience to survive Covid-19.

The firm added that some deals targeted niches or new concepts within the leisure sector, which are predicted to show high growth.

Notable transactions over the past year include deals with Boxpark, which received investment from mid-market private equity firm LDC, and Punch Pubs, which was acquired by US-based and Softbank-owned Fortress Investment Group.

Electra Callan, private equity partner at Mayer Brown, said: “UK leisure is primed for a bounce back and private equity firms know this.

“The sharp rise in deals reflects the confidence funds have in the sector’s turnaround and the growth opportunities available, even for those that have done well from the recent challenges to the sector.

“There are still excellent returns on offer for PE funds in the leisure sector if they look in the right places. In the last 12 months many have clearly taken the opportunity to pick up assets with huge potential.”

Mayer Brown is a global law firm with 200 lawyers based in each of its branches in New York, London and Hong Kong.