Sector Retail, consumer and leisure
Location Surrey, UK
Exit date July 2004
Investment status Realised
Exit details 3.2 x return and 225% IRR

Ster Century

The company

When Inflexion backed the buyout in 2003, Ster Century was an 87 screen multiplex cinema chain operating from seven sites in the UK and Ireland. At the time, the cinemas were brand new and the previous owners, a joint venture between two South African companies, had invested over £30 million on the chain’s sites which were hyper modern, attractive, well located and ultra wide-screen.

Growth strategy

Well-invested with a dynamic management team, Ster was well placed to accelerate expansion in the UK. The company sought an experienced investor to add firepower to its growth ambitions.

The Inflexion difference

During our period of ownership, profits doubled as Ster’s management renegotiated film costs, held rent reviews and introduced a bonus scheme to incentivise cinema managers. As a result, cash generation was accelerated and could be used to pay down bank debt swiftly.

Operating in a rapidly consolidating market, we were approached by a number of financial acquirers within a short time period from our initial investment. Seeing further opportunity, the management team chose to reinvest in the business with new financial partners and we sold our investment within twelve months. At the time of exit, Ster enjoyed one of the highest rates of box office revenue per screen in the UK.