Pageant and NCB take over Xtra-vision in €32m deal

DUBLIN INVESTMENT company Pageant Holdings and a fund run by NCB Stockbrokers have emerged as the buyers of entertainment chain Xtra-vision from US group Blockbuster in a deal worth up to €32 million.

Pageant, whose principals Peter O’Grady Walshe and Nick Furlong have joined the Xtra-vision board, will be the majority shareholder after the deal, which was funded by Bank of Scotland (Ireland). The NCB Ventures fund will have a significant shareholding and the chain’s continuing management team are taking a stake of some 10 per cent.

Outgoing Xtra-vision chief executive Martin Higgins will stay on after the transaction with Blockbuster, based in Dallas, to manage its British and European operations.

Former Xtra-vision finance director Tony Keating succeeds Mr Higgins as chief of the business, which has 186 stores in the Republic and Northern Ireland and 1,400 staff.

The company specialises in DVD rentals, the sale of electronic games and equipment and music sales. The acquiring vehicle, Birchhall Investments, was advised by NCB Corporate Finance. Financo Inc advised Blockbuster, which has operations in Asia and Australia in addition to its US and European units.

The deal gives scope to Xtra-vision management shareholders to increase their stake subject to the performance of the business. Birchall buys Xtra-vision debt-fee. In the year to January 4th, the company generated pretax profits of €6.2 million.

Given the seasonal importance of trading in final quarter of the year, the €32 million consideration depends on the firm’s performance in the 52-week period ending on January 3rd next.

Pageant became majority owner of Xtra-vision when it was taken private in 1994 by a consortium involving investment funds HSBC Private Equity and 3i. Mr O’Grady Walshe was managing director of Xtra-vision at that time.

In 1997 the business was acquired by Blockbuster.

Mr Furlong was founder of DVD distribution business Pilton and sold it to DCC the industrial holding company in 2005. Michael Murphy and Leo Hamill join the Xtra-vision board to represent the interest of NCB Ventures, the private equity arm of NCB with €94 million under management for clients.

Blockbuster chairman and chief executive Jim Keyes said Xtra-vision “performed very well during our ownership and we believe it is well positioned for ongoing success under the ownership of Birchhall Investments”.

Between 1998 and 2007, Xtra-vision generated more than $175 million (€121.97 million) in earnings before interest, tax, depreciation and amortisation, more than $50 million of which was reinvested in the business.