Alchemy hoping to turn pubs into gold

Alchemy Partners has acquired a portfolio of 178 managed city centre pubs from Punch Taverns for £177m, providing a partial exit for Punch’s private equity owners Texas Pacific, Blackstone, Merrill Lynch and CVC Capital. Alchemy acquired the pubs through newco Tattershall Castle Group, with Anglo-Irish Bank providing debt to support the acquisition.

The private equity consortium initially acquired the group in May 2002, and is currently in negotiations with Punch Taverns and Mitchells and Butler over a sale and break-up of the remaining 2,000-pub estate. The sale of the city centre bars represents part of a tidying up exercise that also saw the group sell 360 pubs to Robert Tchenguiz’s Globe Taverns and a further 130 Premier Lodge hotels to Whitbread.

“We are delighted to have backed this transaction – we always wanted a flagship pub!” said Jon Moulton, Alchemy’s managing partner.

Moulton has previous form in the pub game, having doubled his money on the 1,000-strong pubco Innspired, which was sold to Punch for £335m in 2004. The Punch estate has been on the market for some time and was acquired by Alchemy after the initial auction broke down earlier this year. Alchemy will look to bolt on further acquisitions as the larger pub companies continue to dispose of non-core operations.

“This deal allows Spirit to focus on our core community and food-led pubs, which, as demonstrated by our trading figures, continue to gain real momentum,” said Karen Jones, chief executive officer of Spirit.

Law firm Macfarlanes advised Alchemy on the deal. Alchemy and Tattershall Castle Group were also advised by KPMG and by the environmental consultancy Environ. Spirit Group, the vendor, was advised by Slaughter and May, while Anglo-Irish Bank was advised by Berwin Leighton Paisner.