Investee Company – Porter Black Holdings (UK)
Investee Company Business Type – Operator of public houses
Type of Financing – Management buy-in
Finance Package Providers – Bank of Scotland, Carlsberg Tetley
Equity Leader (Individual) – Donald Fowler, Bank of Scotland
Debt Providers – Bank of Scotland
Debt Type – Senior debt, mezzanine, loan stock
Debt Leader (Individual) – Donald Fowler, Bank of Scotland
Equity Amount – Undisclosed
Total Deal Value – £8.3 million
Other Advisors – Catalyst Corporate Finance advised management and the newco on the deal. Browne Jacobson advised management on legal aspects of the transaction. Dundas & Wilson were advisers to Bank of Scotland
Comments – Bank of Scotland Integrated Finance together with Carlsberg Tetley has provided the management team of Porter Black Holdings with a debt and equity package worth £8.3 million. The package was provided to fund the acquisition of Lionheart Inns, the UK managed pub division of Ann Street Group Ltd.
The Integrated Finance team of Bank of Scotland comprising Donald Fowler, Nigel Moss and Ron Adam provided the majority of the funding needed by Porter Black to purchase the 16 public houses located across the south of England. Bank of Scotland will also provide the additional capital necessary to enable Lionheart to achieve a growth target of 100 pubs within 18 months. The group has signed a five year supply contract with brewer Carlsberg Tetley and in the future will continue to trade under the Lionheart Inns name.
Lionheart Inns was established in 1997 as a managed pub and restaurant business by Jersey-based Anne Street Group Ltd. The company operates traditional pubs and modern wine bars aimed at consumers aged between 25-35 within a mixture of community and town centres such as London, Kent, South Wales and the South West.
The Bank of Scotland team structured a long term funding package of senior debt, mezzanine and loan stock while also subscribing for an equity stake in the company.
The Lionheart Inns deal is the third pub sector transaction completed by the Integrated Finance team in 2002. In April 2002, the team provided £131 million acquisition finance for Nobel House Pub Company and subsequently arranged a £14 million debt and equity package to fund the expansion of Massive Limited.
Donald Fowler, associate director of Integrated Finance, said: “The Bank’s Integrated Finance product is ideally suited to the pub sector because of its cash generative nature and we are looking forward to working with the management team and Carlsberg Tetley to grow the estate.”
The Leeds office of Bank of Scotland Corporate Banking has also today provided debt financing for the MBO of Gordon Jopling Group, a provider of specialist ingredients and raw material for the food industry.
In 2000, Corporate Banking at BOS contributed £352 million – or some 29% – towards the Bank of Scotland’s pre-tax profit.