Gambling operator Gala Coral announced earlier today that it had agreed to sell its Gala Bingo retail business to London-based investment trust company Caledonia Investments for the total amount of £241 million.
The transaction is likely to be completed within the course of the next two months, provided that it is given the nod from the UK Gambling Commission. Gala Coral’s digital gaming business would still be closely related with the Gala Bingo retail one. The gambling operator noted that the strategic connection between the two divisions would be managed under the so-called Collaboration Agreement.
Under the said agreement, Caledonia Investments would purchase a total of 130 Gala Bingo halls. Yet, the company would still manage those under the Gala brand and they would trade under their old brand. What is more, Gala Coral would retain both Galabingo.com and Galacasino.com.
Last September, the major gambling operator announced that it was interested in selling its bingo retail division and that Lazard had been hired to advise it throughout the selling process. A few months later, the company revealed that it would sell a total of 47 Gala Bingo facilities to UK-based investment manager M&G Investments.
The announcement about the strategic deal with Caledonia Investments came at a time when Gala Coral is awaiting regulatory approval to complete its £2.3-billion merger with rival gambling operator Ladbrokes. The combined entity is expected to turn into one of the biggest betting and gambling companies within the borders of the United Kingdom.
Commenting on the sale of the bingo retail business, Carl Leaver, Chief Executive Officer of Gala Coral, said that they are extremely happy with their decision. The executive further noted that the transaction was yet another “transformative step” for the operator after the turnaround of its business over the last few years. Mr. Leaver expressed confidence that the Gala Bingo retail business would continue thriving under its new owner. With the sale being announced, Gala Coral Group would now focus its attention on growing and further developing its retail sports betting and online divisions as well as on the completion of the Ladbrokes merger.
Duncan Johnson, Head of Unquoted Investments at Caledonia Investments, pointed out that they are delighted with their newest acquisition as it is a “defensive, enduring business model”, which would most definitely generate strong cash and dividend yield and is a perfect fit for the investment criteria that Caledonia Investments has always been looking for.
