UK: Young & Co's Brewery acquires Geronimo Inns
- Deal valued at GBP60m (US$93.4m)
- Expands Young's reach in food-led pubs
- Geronimo management to stay on
Young & Co's Brewery expands pub network with Geronimo buy
Young & Co's Brewery has acquired Geronimo Group Ltd for GBP60m (US$93.4m) in cash as it seeks to expand its network of food-based pubs in the UK.
Young's said today (16 December) that it will acquire Geronimo's 26 pubs, of which 22 are based in central London, from the company's shareholders, who include Penta Capital and Rupert and Jo Clevely.
The deal significantly enhances Young's presence in food-based pubs. Most of the UK's medium and large pub companies are seeking to acquire more outlets that serve food as sales continue to suffer at traditional 'drinks-led' pubs and bars.
Food contributes to around 40% of Geronimo's annual sales. "The transaction achieves an important step change in the size of the Young's managed estate, which will be increased by more than 20% to 148 pubs, taking the total estate to 247 pubs," said Young's, which also operates a brewing venture with Charles Wells.
Stephen Goodyear, CEO of Young's, added: "Geronimo's team also brings considerable expertise in the operation of leases and concessions in high footfall retail locations such as airports and shopping centres and this represents a new growth opportunity for us."
Young's said that it expects to achieve a total GBP2.5m in synergies from the deal, which it will finance with a GBP100m, five-year bank facility.
The management team of Geronimo will be staying with Young's and Rupert Clevely will join as an executive director of the Young's Board with immediate effect. He will also be managing director of Geronimo, which will retain a separate team. Jo Clevely will continue to drive design strategy at Geronimo pubs.
Geronimo is expected to report EBITDA of GBP8.2m for the year to the end of June 2011, versus GBP6.1m in the previous year. Both figures exclude overhead costs, which were around GBP3m in the previous year.
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