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European buy-out house AXA Private Equity has acquired Löwen Play, Germany’s second largest amusement arcade operator, from Dutch investor Waterland Private Equity for an undisclosed sum.

Löwen Play operates more than 4,000 machines across 170 arcades as well as a limited number of gaming machines in restaurants and pubs in Germany, resulting in a combined total of 215 sites. The Bingen-headquartered company employs more than 700 people and generated revenues in excess of €85 million (£67 million) last year.

With approximately 5,000 providers in the German amusement market, operating 8,000 arcades with sales of around €3.2 billion (£2.5 billion), there are opportunities for consolidation. The four largest providers account for around 9 per cent of the fragmented market – and these are also the only providers that operate more than 100 arcades each.

Commenting on the deal, AXA MD Christof Naményi says: “There are opportunities for consolidation in the German and European amusement arcade markets and we believe that Löwen Play will continue to grow as it has done in the past, even in difficult economic times.“

Löwen Play MD, Josef Kron, expects the AXA Private Equity team will provide the company with long-term support during the next development phase, assisting the management in further reinforcing the business model.

CMS Hasche Sigle was legal adviser to existing client Waterland Private Equity. The team, led by Dr Katharina Specht-Jonen and Marcus Wuntke, both PE/M&A partners in Cologne, advised the Dutch investor on its original investment in 2006. Acquisition finance partners Dr Herbert Wiehe and Dr Roman Jordans, and tax partners Dr Angelika Thies and Jesko Nobiling completed the CMS team.

Specht-Jonen described the sales process as straight forward. “The people involved in the deal have known each other for several years,” she adds, “including the legal advisers. The transactional documents were signed within six weeks, and the deal closed a month later following approval from the authorities.”

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