Young’s has acquired Redcomb Pubs Ltd, a company that owns and operates 15 pubs in prime locations, for £34m.
The business currently generates run-rate EBITDA of approximately £4m. Investment in the pubs is planned over the next two years which will naturally have a short-term impact on profitability but should have a positive impact thereafter.
Therefore, in the first full year of ownership, the pubs are expected to trade at the current run-rate, subject to the impact of any investments undertaken.
The pubs will complement the Young’s managed house estate both in and around London, build upon a growing presence in the South West and further enhance the Young’s brand. Each of the pubs has a premium offering and distinctive personality that differentiates it in its local market.
As a result of the transaction, the Young’s managed estate has increased by 8% from 185 to 200. With 70 tenanted pubs in its Ram Pub Company, the total Young’s pub estate will increase to 270 pubs.
The Redcomb estate comprises the following pubs:
Freeholds
Boat House, Instow
Carnavon Arms, Highclere
Manor Arms, Streatham
Seagate, Appledore (including 18 The Quay)
Theodore Bullfrog, Charing Cross (part freehold / part leasehold)
Village Inn, Ealing
Leaseholds
Alphabet, Islington
Bickley, Chislehurst
Cherry Tree, East Dulwich
Coach & Horses, Greenwich Market
Lockhouse, Paddington Basin
Old Shades, Whitehall
Old Manor, Potters Bar
Station Hotel, Hither Green
Worplesdon Place, Guildford (pictured)
The acquisition has been financed through existing debt facilities with Barclays and HSBC. Young’s retains a strong balance sheet following the acquisition and a robust long-term financing package.
Young's CEO Patrick Dardis said, “The team at Redcomb, headed by Dan Shotton and Mark Draper, has created an outstanding, well -invested estate of pubs, which we are delighted to add to the Young’s fold.
'The acquisition of these pubs represents an excellent opportunity to continue the growth of the Young’s managed estate. They fit very well with our expansion strategy which is focussed on high quality managed houses. These pubs are all in prime locations, where our premium offer will work extremely well.”