PPM Ventures and Royal Bank of Scotland have continued their support of the Barracuda Group by backing its acquisition of 50 pubs from Wolverhampton & Dudley Breweries. This transaction, worth GBP37.25 million, brings the total number of pubs owned by the group to 135.
The pub management company was formed last summer to buy 35 pubs from Enterprise Inns after its acquisition of Swallow Inns & Restaurants. Mark McQuater, previously chief executive of Greenall’s Pubs and Restaurants, led the MBI team, which was financed to the tune of GBP66 million by PPM Ventures and Royal Bank of Scotland. In October 2000 Barracuda bought a further 61 managed pubs from The Ambishus Pub Company in a GBP38 million public to private deal. The group now employs 2,400 staff and has a consolidated turnover of almost GBP70 million.
The most recent addition to the group includes 22 Varsity pubs, a student orientated chain of bars, which is currently achieving seven per cent like for like sales growth. The deal also brings Barracuda 11 TP Woods pubs. The pubs acquired from Wolverhampton & Dudley Breweries are mainly in the Midlands and the North of England, complementing the existing network of pubs in the southeast of England. In the 12 months to August 25, 2001 these pubs generated GBP4 million of operating profit. They have a net book value of GBP45.9 million.
This summer, Wolverhampton & Dudley Breweries survived a hostile GBP485 million bid from Pubmaster, whose former investors include BC Partners, Bridgepoint Capital and PPM Ventures. During the take-over process the company promised to return GBP100 million to investors through a share buy-back, this will only be possible if the company has realised GBP65 million from a programme of disposals started in July. To date the company has sold 68 pubs for a total of GBP44.5 million. The company still has around 100 pubs on the market, including 39 bars under the Pitcher & Piano brand name. Ralph Findlay, chief executive of Wolverhampton & Dudley Breweries, said: “This disposal is consistent with our increased focus on community freehold pubs. We are making good progress towards our intended target for realising value from non-core assets.”
The vendor was advised by PricewaterhouseCoopers.