Morgan Grenfell Private Equity which last year was folded into DB Capital is reaping the benefits from its investment in the Laurel Pubs business with a second exit from the group. MGPE has sold Pub Partnerships comprising 1,860 pubs for GBP875 million to Enterprise Inns. Barclays Bank, Deutsche Bank, Lehman Commercial Paper and The Royal Bank of Scotland are jointly underwriting a GBP1.28 billion credit facility for Enterprise Inns for the purpose of the acquisition and the refinancing of existing facilities.
MGPE acquired the Laurel Pub Company in March 2001 in a deal worth GBP1.625 billion. The following May, MGPE made its first exit from the group with the sale of 439 managed pubs to Enterprise for around GBP260 million. The selling phase for the pubs division is over for the time being and Laurel Pub Company is now left with some 600 pubs which MGPE intends to develop further. At its current valuation, the remaining pubs business is thought to be worth around GBP800 million, but could fetch a price of around GBP1.2 billion when it comes to exit.
With this acquisition, Enterprise continues to build on its emporium of pubs businesses. Last month Cinven and Enterprise Inns won the battle to acquire Unique Pub Company and Voyager Pub Group in a GBP2 billion deal for an estate of 4,189 pubs.