Stonegate Pub Company has this morning announced that it has reached agreement to acquire Walkabout operator Intertain from Better Capital, in a deal vauled at £39.5m.
Last week, Better Capital reported that it believed that Intertain was ‘exit ready’, valuing the business at the end of September at £38m.
Intertain currently operates 30 sites primarily under the Walkabout brand. It is a drinks-led bar operator focusing on the high street and sport-led entertainment, complementing two of Stonegate’s key strengths.
The business is present in prime town and city locations across the UK including London, Cardiff, Brighton and Birmingham. In addition, this acquisition takes Stonegate into some new geographies.
Stonegate has a proven track record of success in identifying, unlocking value and ultimately delivering higher returns from the pub assets which it has acquired and has built a reputation for consistently achieving industry-leading returns on its investments.
Examples include the acquisitions of Bramwell in 2013 and Tattershall Castle Group in 2015, both of which continue to perform strongly.
Intertain underwent a CVA in early 2015 and surrendered unprofitable leases. Stonegate plans to invest in many of the 30 Intertain sites being acquired over the next three years.
Following the acquisition, Stonegate will comprise 692 operating venues, further consolidating the group’s position as a leading high street, managed pub operator in the UK.
The acquisition is due to complete on 7 December 2016.
Simon Longbottom, chief executive of Stonegate, said: “We are delighted to be acquiring Intertain which is a business we know well and which we have hand-picked for its complementary fit with our existing portfolio. This is another great acquisition for Stonegate and is being acquired at an attractive multiple of c.5.0x pro forma EBITDA, taking into account anticipated synergies. Our track record of integrating, investing in and ultimately maximising value from drinks-led, town and city centre sites is unparalleled as we continue to exploit this market opportunity.
“Intertain’s strong association with sport in high street locations is synonymous with Stonegate’s prowess in this market segment and further consolidates our position as the leading provider of sports-led entertainment in the high street pub and bar market.
“We look forward to welcoming the employees of Intertain into the enlarged Group and working with them to drive the ongoing success of the business as we continue to progress our dual growth strategy of inward investment in our existing estate and expansion via selective acquisition.”
John Leslie, chief executive of Intertain, said: “I couldn’t wish for a better home for Intertain than within Stonegate. Simon and the team are excellent operators, know the business well and will continue to invest, enabling both the business and the talented people within it to realise their full potential. It is a great cultural fit with Stonegate’s growing.”
Better Capital’s 2012 Fund invested in Intertain in November 2014, and said it had successfully restructured and invested in the business, returning it to a profitable and cash generative group.
Better Capital said: “The sale of Intertain is expected to realise net proceeds to the 2012 Fund of £33.7m at completion, with the remaining proceeds deferred pending the resolution of certain legacy matters. Overall estimated net proceeds from the transaction will be a little below the valuation published in the 2016 Interim Report of £38m.”
