Takeovers and Mergers - Vue on the Growth Trail!

News of a £20m takeover here which will be particularly relevant to colleagues and students who joined us recently for the BUSS4 revision workshops at cinemas around the UK…

Vue Entertainment (with whom tutor2u has a strategic partnership) has just confirmed that they have acquired the Apollo cinema chain for around £20m. The impending takeover was reported in the Independent and has now been confirmed in the FT.

Whilst the UK cinema market remains highly fragmented, the three leading operators (Vue, Cineworld and Odeon & UCI) now control 70% of the market between them.Further acquisitions by these three are expected, although any merger of two of the three big players would inevitably be referred to the Competition Commission.

The CEO of Vue (Tim Richards) gave this interesting quote which confirmed his strategy of combining both organic growth (e.g. innovation) with aggressive external growth:

“We will continue to grow aggressively and look for high quality assets on the UK and the continent.”

It looks like there is a good strategic fit between Vue and Apollo. There is relatively little geographical overlap between the two cinema portfolios and also the Apollo chain seems to be very well invested. According to Richards:

“Their 14 cinemas are built to very high specifications complete with Dolby digital surround sound and large wall-to-wall screens,” said Vue CEO Tim Richards about the Apollo theaters. “The cinemas are also 100 percent equipped with Sony’s superb market leading digital 4K projectors, which are the same as those being rolled out across Vue. These high-quality cinemas perfectly complement Vue’s existing circuit of 71 cinemas.”

Vue itself was the subject of a private equity-backed takeover in 2010 when it was bought by Doughty Hanson for £450m.

The combination of Vue and Apollo will have 85 multiplexes with close to 800 screens. Apollo is best known for its screens in Piccadilly Circus, although I suspect that tutor2u will stay at our current popular venues in Fulham Broadway and Stratford City for now!