Nomura International’s Principal Finance Group (PFG) has sold its 1,200-strong pub group Inn Partnership to Pubmaster for GBP523 million.
Tudor Street Acquisitions, a company formed and backed by Nomura International, acquired Inn Partnership in December 1998 for GBP370 million from Greenalls Group. For the year ended September 30, 2001; Inn Partnership’s EBITDA was GBP51.7 million.
Guy Hands, head of Terra Firma, the principal finance team that is about to spin out of Nomura, said: “Inn Partnership has been an excellent investment for us which has been actively managed to create value. Under new management, the portfolio has been managed to improve the reliability and quality of its cash flow and, as a result of the measures taken, we have achieved an appropriate return on our investment.”
Pubmaster’s acquisition creates an estate of 3,200 pubs and is the company’s biggest corporate purchase to date. Pubmaster paid GBP101 million for the shares of the business and paid off the senior debt, subordinated debt provided by Nomura International and long term incentive plan obligations in the amount of GBP422 million.
Pubmaster chief executive, John Sands, said: “This is a significant acquisition that increases the size of Pubmaster’s estate by more than 60 per cent and confirms our position as one of the UK’s most ambitious pub companies.”
Terra Firma is an independent entity set up by Guy Hands and the Nomura principal finance group team. Nomura has signed an agreement for Terra Firma to take over the future management of its portfolio of private equity investments. Nomura will also make an investment in Terra Firma’s new private equity fund of 10 per cent of the aggregate commitments to the fund, which has a target of up to EURO300 million.