Game, set and match to Caird Capital and London & Regional Properties?

Hindsight is a wonderful thing.  Pre the 2008 financial crisis Bank of Scotland Corporate Banking (BoS) had been, like many other private equity players, pretty busy. In 2006 it invested over GBP 1.7bn and in 2007 deployed another GBP 1.3bn. Its largest investment in 2007 was the GBP 925m acquisition of the David Lloyd Leisure Group, partnering with London & Regional Properties to buy the fitness club chain from Whitbread plc.

Any company operating in the leisure sector during the height of a recession, when disposable incomes are squeezed, would suffer, but add to that the significant debt burden of the leveraged buyout and the David Lloyd Group was always going to take quite some time before investors saw any return on their money. As we know, BoS became part of Lloyds, and Lloyds retained a 30% stake in David Lloyd via its new vehicle, Caird Capital.  So, a fairly tumultuous few years in terms of ownership and trading performance for the fitness club chain.

However, this weekend a potential buyer was linked to a possible takeover of the David Lloyd. That buyer is KSL Capital Partners, and this wouldn’t be their first foray in to the leisure industry. KSL are, according to their website, “a US private equity firm dedicated to investments in the travel and leisure business”. They have been pretty active in the last couple of years, acquiring The Belfry Hotel and Golf complex and Malmaison Hotels in the UK in the last 6 months alone.

Should this deal proceed, it will at least generate some return for Lloyds and, potentially, the British taxpayer!!

Filed under: private equity, health, M&A, Banking