Mitchells & Butlers sells non-core pub package in £373m deal
Mitchells & Butlers (M&B), the managed pub operator, has sold 333 of its non-core pubs for £373m to Stonegate Pub Company, a new vehicle backed by TDR Capital, the private equity firm.
In a statement released this morning, M&B said the pubs had attributable ebitda and operating profit in the 52 weeks ended 10 April 2010 of £52m and £35m respectively, and it represented an ebitda multiple of 7.2x on the gross proceeds.
The package included 52 Scream pubs, 71 High Street Bars & Venues, 75 Town Pubs and 67 Community Pubs, plus 68 other small pubs and the disposal comes as the operator, which is led by chief executive Adam Fowle tries to reposition itself as more of a food-led business.
Reinvesting in the eating out market
The company said that it intends to reinvest the proceeds from the disposal into “higher growth opportunities” within the “informal eating out market”.
It said the remaining 116 pubs within those concepts that it had sold would be converted into its expansion brands – which includes the likes of Toby Carvery, Vintage Inns and Miller & Carter.
Completion of the deal is expected to occur by mid-November. TDR Capital is a private equity firm based in London and founded in 2002. TDR Capital currently manages funds worth Eu2.6bn (£2.14bn), and has significant a background leisure businesses with investments in CenterParcs, Punch, Ask and Pizza Express.
Reshaping M&B
John Lovering, chairman, said: "I am delighted with the progress being made on reshaping Mitchells & Butlers' portfolio in line with the strategy we announced in March.
“Adam Fowle and the new management team are making excellent progress in accelerating the pace of change throughout the organisation. The cash resources released by the sale programme will allow the company to accelerate its growth into the informal eating out market.”
Fowle added: “This disposal, when combined with the sale of our lodge and bowling businesses, completes the first stage of our strategy.
“This will now enable us to reinvest in the informal eating out market where our market leading brands, corporate scale and operational capability will deliver attractive growth and investment returns for our shareholders."
Martyn Leek is news editor of BigHospitality's sister title M&C Report.
