Nomura International’s Principal Finance Group (PFG) has sold its 1,200-strong pub group Inn Partnership to Pubmaster for £523 million. Nomura is also looking to dispose of its remaining pub businesses and is eyeing up opportunities to sell Voyager Pub Group and Unique Pub Company.
Tudor Street Acquisitions, a company formed and backed by Nomura International acquired Inn Partnership in December 1998 for £370 million from Greenalls Group. For the year ended 30 September 2001, Inn Partnership’s EBITDA was £51.7 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 cashflow 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 £101 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 £422 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.”
Nomura has also put up its remaining pub businesses for sale. Schroder Salomon Smith Barney is handling the sale of Voyager Pub Group and Unique Pub Company. There is speculation that UK pubs company, Enterprise Inns and Punch are battling to acquire the two groups, which are said to have a price tag of between £2 billion and £2.2 billion.
Nomura acquired Voyager’s 990 pubs from Bass in March 2001 for £625 million. The group snapped up Unique from British brewer Courage and Grand Metropolitan in September 1997 for £1.2 billion. Unique comprises 3,300 pubs.
Terra Firma, an indepedent entity set up by Guy Hands and the current principal finance group team will become fully operational by the end of March. 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 €300 million.