Birchhall buys Xtra-vision for €31m

BLOCKBUSTER has sold Xtra-vision to Irish firm Birchhall Investments for up to $45 million (€31m).

Newly formed Birchhall is owned by NCB Ventures and by clients of the securities firm NCB Group.

Blockbuster expects to use a majority of the proceeds from the sale to boost liquidity. Analysts have said liquidity has been a key issue for Blockbuster, which earlier this year faced doubts about its ability to continue operating.

Blockbuster purchased Xtra-vision in 1997 and it now employs 1,400 full-time and part-time staff in Ireland in 186 stores.

Blockbuster chairman and chief executive, Jim Keyes, said: “Today’s announcement furthers our goal of improving liquidity and underscores our intent to advance the sale and licensing of our international assets as we focus on the continued transformation of our North American business.

“Xtra-vision is the leading entertainment chain in Ireland and one of the most recognisable brand names in the country. It has performed very well during our ownership and we believe it is well positioned for ongoing success under the ownership of Birchhall Investments.”

The eventual cost of the Birchhall takeover will depend on Xtra-vision’s full-year results, which will be published early next year.

According to recently filed accounts for Xtra-vision the company sustained a 30% drop in pre-tax profits to €6.5m in the year to the end of January 6 last year.

Managing partner of NCB Ventures, Michael Murphy said: “We’re pleased to have participated in this acquisition, which adds one of Ireland’s leading brands to our portfolio. We look forward to working with the management team at Xtra-vision to build on its success and grow the business long term.

“We think there are great opportunities to build on Xtra-vision’s high brand recognition and visibility in the home entertainment market in Ireland. The transaction will be seamless for members and employees of Xtra-vision Limited.”