Escape Hunt agrees to acquire its French master franchise partner, BGP Escape

LONDON: Escape Hunt, a global leader in the growing escape rooms sector, has conditionally agreed terms to acquire its French master franchise partner, BGP Escape.

The deal is expected to close within the coming weeks, subject to completion of due diligence, finalisation of contracts and compliance with local law requirements.

In connection with the proposed acquisition, Escape Hunt also announces a firm placing of 8,036,904 new ordinary shares of 1.25p each at 17.5 pence per share to raise approximately £1.4 million before expenses.

The placing price represents a discount of 4 percent to the 5 day average closing middle market price of the Company’s shares between 15 and 21 January 2021, being the last five trading days prior to this announcement.

The Placing has been completed within the Company’s existing shareholder authorities to disapply pre-emption rights.

Key Highlights

·    Excluding the Earnout (as defined below), the Proposed Acquisition values BGP Escape at approximately 1x its average unaudited EBITDA for 2018 and 2019 after all franchise fees paid to Escape Hunt.

·    On completion of the Proposed Acquisition, the total number of Escape Hunt owner-operated sites will increase to 17.

·    The Directors believe that this number of owner-managed sites should be capable of supporting positive Group EBITDA and positive cash generation, once new site performance has matured, conditions have normalised post COVID-19 and subject to reasonable assumptions in other areas of the Group.

·    Placing of 8,036,904 New Ordinary Shares to raise approximately £1.4 million (before expenses) at 17.5 pence per share utilising the Company’s existing shareholder authorities.

·    Placing Price represents a discount of 4 per cent. to the 5 day average closing middle market price of the Company’s shares between 15 and 21 January 2021, being the last five trading days prior to this announcement.

·    The net proceeds of the Placing will be used as follows:

• approximately £330k as consideration for the Proposed Acquisition and associated costs;
• £150k to fund potential additional investment in the French and Belgian business; and
• the balance to continue the UK roll-out of owner-operated sites.

·    John Story, a Non-Executive Director of the Company, has subscribed for a total of 2,447,600 New Ordinary Shares in the Placing.

·    The Proposed Acquisition remains subject to completion of due diligence, finalisation of contracts and compliance with local law requirements.

·    Significant progress made in all aspects of the Company’s five point plan for value creation, as announced in June 2020, placing the Company in a substantially stronger position to benefit from any recovery in demand post COVID-19.

Commenting, Richard Harpham, Escape Hunt’s CEO, said: “Prior to COVID, the French/Belgian territory was a very strong performer for Escape Hunt and we are confident that demand will return to previous levels once the current restrictions are lifted.

The BGP Escape management team has created a wonderful business over the past 6 years and it is a pleasure to welcome them to our central team as we consider together how best to expand the Company’s reach.

We are excited about the prospects for the region and are delighted to be the owner of the business for the next stage in its journey.

Furthermore, we are delighted to have received strong support from existing investors in this Placing and are eager to put the proceeds to work.”

BGP Escape has been part of Escape Hunt’s franchise network since 2014 and today comprises two owned sites (one in Paris and one in Brussels) and 11 sub-franchisee sites spread across France.

On completion of the proposed acquisition, the sites in Paris and Brussels will become owner-managed bringing the total number of the Group’s owner-managed sites to 17.

BBC Studios and Escape Hunt launch new Doctor Who game

The Escape Hunt Group is a global leader in providing escape-the-room experiences delivered through a network of owner-operated sites in the UK, an international network of franchised outlets in five continents, and through digitally delivered games which can be played remotely. 

Its products enjoy consistent premium customer ratings and cater for leisure or teambuilding, in small groups or large, and are suitable for consumers, businesses and other organisations. 

Having been re-admitted to AIM in May 2017, the Company has a strategy of creating high quality premium games and experiences delivered through multiple formats and which can incorporate branded IP content. https://escapehunt.com/