Red Oak Taverns, the operator of 161 pubs, has secured a £42m refinancing and acquisition package with OakNorth, MCA has learnt.
The deal is the largest transaction to date for OakNorth, which has previously provided funding for White Brasseries, Inception Group and Adventure Bar Group among other companies in the sector.
The funds will be used to refinance existing debt and provide Red Oak Taverns with stand-by financing for future acquisitions.
Founded in 2011 by Mark Grunnell and Aaron Brown, Red Oak has grown through two group acquisitions – of 32 pubs in 2011 and the 146-strong GRS package in 2015.
Grunnell said: “This was a competitive process but OakNorth was able to differentiate itself from other lenders by structuring a flexible and bespoke debt finance package for us, which significantly reduces our cost of capital and enables us to release funds, as required, in line with our acquisition strategy. The team have a thorough understanding of the market and, having already worked with us during the previous two years, fully understand how we run our business and drive our profitability and net asset value. They have also bought into our future growth plans, providing us with the financial firepower to take advantage of small and medium sized acquisition opportunities. We particularly enjoyed meeting Credit Committee and being given the opportunity to discuss our borrowing requirements directly with the decision makers.”
Mohith Sondhi, debt finance director at OakNorth said: “Since our launch in September 2015, we have been focused on one thing – helping UK businesses achieve their growth ambitions, backing excellent management teams in the process. Both Mark and Aaron have proven with Red Oak Taverns that they can effectively acquire and integrate pub groups and continue to drive the business forward, even through uncertain and challenging economic conditions. Their successful ‘buy and build’ strategy has seen them grow to 161 sites in less than a decade and demonstrates the incredible ambition of the business. We are delighted to have supported them in this transaction and look forward to working with them on their continued growth in the future.”