NewRiver REIT completes £222.3m sale of community pubs business
Mon, 26 Jul 2021 | BUSINESS SALE
NewRiver REIT has agreed to sell its community pub business Hawthorn Leisure to Admiral Taverns for £222.3 million. The deal represents slightly over a 16x multiple of Hawthorn’s most recently reported revenue of £13.8 million for the year ending March 2020.
Hawthorn Leisure’s estate totals 674 leased and tenanted and operator-managed pubs. NewRiver, which first announced plans to sell the business in April, will use the proceeds from the sale to strengthen its balance sheet, help cut its loan-to-value ratio to under 40 per cent and refocus its portfolio.
The acquisition takes Chester-headquartered Admiral Taverns’ portfolio of pubs to around 1,500 and forms part of its plans to grow its community pub footprint. The deal comes at a time of booming deal-making in the UK pub sector. Pub group Punch, which acquired Ram Pub Company from Young’s earlier this month, was also reported to be interested in Hawthorn.
Admiral Taverns Chief Executive Chris Jowsey said: “This is one of the biggest acquisitions by Admiral to date and delivers on our strategy to build our estate to 1,500 sustainable pubs. It is a really exciting step forward for the business and we remain committed to the supportive partnership model, which is highly regarded by licensees.”
"Our wet-led, community focused, supportive culture is very much shared by Hawthorn and I'd like to take this opportunity to welcome our new licensees and colleagues to Admiral. The acquisition has allowed us to acquire an excellent portfolio of pubs which we look forward to developing through our award-winning and highly supportive approach."
NewRiver Chief Executive Allan Lockhart added: Over recent years, we have grown Hawthorn to become the UK’s leading community and wet-led pub business. As a consequence of this, we received significant interest from a range of potential buyers for Hawthorn, following the divestment plan we announced in April 2021.”
“We have now agreed the sale of Hawthorn which, once completed, will deliver on our key priority to reset loan-to-value, strengthening our balance sheet and enabling us to focus on executing our resilient retail strategy.”
The sale is expected to complete in August, once shareholder approval has been gained at NewRiver’s general meeting.
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