has been sold to management buyout firm LDC in one of the biggest sales ever agreed by Birmingham City Council.
, LDC has taken control of the business, including the and in Solihull and and in Birmingham city centre.
The deal is worth £307 million – which is more than experts had predicted – and its new owner pledged to “maximise its growth opportunities and achieve its strategic potential”.
The sale offers much-needed respite for the city council’s finances amid a bill of more than £1 billion for .
LDC is the private equity arm of – partly owned by the taxpayer – and won a battle which saw dozens of expressions of interest.
The deal includes a 125-year lease on the NEC site which includes the exhibition halls, Genting Arena and the Resorts World development and 25 year leasehold interests in the ICC and Barclaycard Arena in the city centre.
NEC Group chief executive Paul Thandi said the sale offered a financial boost to the council while promising a brighter future for the group.
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He said: “The council is able to realise substantial proceeds from this transaction whilst providing the group with an opportunity to benefit from numerous growth opportunities in the core and ancillary businesses and internationally, and ensuring it remains a cornerstone of the region’s economic prospects.”
Birmingham City Council is retaining the freehold of all the NEC sites following the deal.
The transaction also protects the existing uses of all venues as well as Symphony Hall.
The transaction values the NEC Group at around £307 million, £15 million of which will be in the form of a loan note, including the value of the leases of the Hilton Metropole and Crowne Plaza hotels on the NEC site which are being retained by the council.
Birmingham City Council has retained a right to claw back certain non-core land at the NEC site for future development.
The transaction does not include various plots of undeveloped land adjacent to the NEC site – primarily east of the M42 – which will be retained by Birmingham City Council and will be a valuable asset amid plans for a HS2 station nearby.
NEC’s defined benefit pension schemes, which have been closed to the accrual of future benefits since 2010, will be retained by the city council.
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Sir Albert Bore, leader of Birmingham City Council, said: “We are very pleased to have attracted a Birmingham-based buyer in LDC that understands the local importance of the NEC and shares our vision for the future.”
Martin Draper, LDC’s chief executive, said: “The NEC Group has developed significantly over recent years and we are delighted to be working with such a strong and experienced team to deliver the NEC’s next exciting phase of development. We also look forward to working closely with both Birmingham and Solihull Councils to support their plans at both the NEC and city centre sites which include the airport expansion, redevelopment of the Paradise Circus area and in connection with the HS2 project.”