PRIVATE equity house Royal London has completed a (pounds) 33.5m management buy-out of McKenzie Group, which owns Glasgow's live music and club venue the Carling Academy along with other sites in the UK.
The investment boosts MKG's financial strength to help pursue its strategy of rolling out the Academy brand. The group already owns the flagship Brixton Academy in London along with venues in several other cities south of the border.
MKG teamed up with T in the Park promoter DF Concerts to create the 2500-capacity venue on the site of the former New Bedford cinema in Eglinton Street, Glasgow. When it opened just over a year ago, the (pounds) 3m nightspot agreed to take a sponsor's name to distinguish itself from the 150-year-old school of the same name and avoid a legal challenge.
Royal London is taking a 52% stake in MKG leaving existing shareholders, MKG's management with three of the UK's leading concert promoters - Metropolis Music, SJM Concerts and MCD Productions - holding the balance of shares. The three promoters represent many international acts as well as collectively owning and promoting some of the biggest outdoor music events, including the V Festival.
Royal London Private Equity director Richard Caston will join the board alongside MKG's senior management team, while the deal provides an exit for the founder shareholders - brewer Charles Wells Ltd and non-executive chairman Ian Howard. Debt for the transaction was provided by Lloyds TSB Corporate.
Caston said: ''We were attracted to MKG because of its leading position in the dedicated live music venue sector, its strong relationships with the principal promoters of live music events and the track record of the incumbent management team.''
John Northcote, who has been managing director of MKG since June 2000, said: ''Our partnership with RLPE will allow us to pursue our strategic growth for the Academy brand, particularly our plans to expand our network of Academy venues in key cities across the UK, reinvest in existing sites and develop other areas of the core business; all of which is excellent news for the live music industry.''
MKG was formed in January 1998 following a management buy-out of Brixton Academy and Shepherd's Bush Empire from Break for the Border.
Investors in RLPE's fund include Royal London Mutual Insurance Society and clients of Morley Fund Managers, Scottish Widows Investment Partnership, Britannic Asset Management and Martin Currie along with other institutional and private individual investors.
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