Private Equity Firm LDC Buys Birmingham's National Exhibition Centre

U.K.-focused private equity firm LDC announced an agreement on Friday to acquire municipally owned National Exhibition Centre Group from the city of Birmingham, in England, in a deal valuing the business at about £307 million ($465 million). LDC, the private equity arm of Lloyds Banking Group plc, formerly known as Lloyds Development Capital, won the company in an auction run by Gleacher Shacklock LLP. Birmingham City Council put the group on the block in March 2014 in part to help pay for compensation claims over equal pay by female staff. Council leader Albert Bore, said the fact that the deal was done by LDC's Birmingham office meant it understood the local importance of the NEC exhibition halls and the associated developments, the International Convention Centre and the Barclaycard Arena. "This will ensure […] that the NEC continues to play a leading role in the wider economic development of the region," Bore said in a statement. NEC's venues have hosted a wide range of events, including G8 and European Union summits and other political and industrial conferences, but also horse and dog shows and major gigs. The business supports about 29,000 jobs and contributes over £2 billion a year to the regional economy. The deal includes not only the NEC, Barclaycard Arena and the Genting Arena, where the Genting Casino Group recently agreed to buy the naming rights, but also the city's stake in Genting Resorts World, a new £200 million casino, retail, leisure and entertainment center being developed by Genting, which will include hotels. NEC subsidiaries, including its ticketing company the Ticket Factory, are also in the package. A spokesman for the city said the council will not retain a share in the business, but will retain the freehold of the land on which it operates. Birmingham will provide a 125-year lease for the Exhibition halls, the Genting Arena and Resorts World, and 25-year leases for for the ICC and the Barclaycard arena. The council is also holding on to the undeveloped land adjacent to the site and has retained the right to claw back certain noncore land at the NEC site for future development. NEC management, under CEO Paul Thandi, will remain with the company and were advised on the deal by Catalyst Corporate Finance and the law firm Gateley LLP. Macquarie Group arranged finance for LDC through its Macquarie Lending arm, led by Adam Joseph. Macquarie said it originated and structured the financing as a bespoke unitranche loan with a 6-1/2-year maturity. Macquarie also introduced Royal Bank of Scotland Group plc to the syndicate before the closing of the deal, with Royal Bank also providing a working capital facility. Macquarie added that it intends to retain a significant holding until maturity. NEC management under CEO Paul Thandi will remain with the company and was advised on the deal by Catalyst Corporate Finance and by Paul Hayward, Paul Simpson, Victoria Metcalfe and John Quentin of the law firm Gateley LLP. LDC chief executive Martin Draper led the negotiation and was advised by Sue Lewis, Patrick Davis, Louise Finnie and Ian Owen of Eversheds LLP on legal matters. Birmingham City Council was advised by Peter Warner and Sandor De Jasay of Gleacher Shacklock and turned to Wragge Lawrence Graham & Co. LLP for legal advice. David Vaughan led the Wragge corporate team, which included Ragi Singh and Laura Dick, while Robert Caddick, Sarah Punshon, Steve White and Rob Sprake advised the council on real estate matters. Read more from:

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