NewRiver has acquired community pub company Bravo Inns for £17.9m.
Bravo Inns owns 44 wet-led community pubs, predominantly located in North West England.
The price paid represents an EBITDA multiple of 6.8 based on the portfolio’s current earnings.
The deal is expected to generate EBITDA of £2.6m per outlet. The yield on the portfolio is expected to be 14%.
The acquisition will increase NewRiver’s exposure to the operator-managed pub model. The firm said this will provide opportunities to drive higher returns through accretive capital expenditure and other asset management initiatives, while providing the company with a higher degree of management control and oversight.
Mark Davies, chief financial officer of NewRiver and chief executive of Hawthorn Leisure, said: “The UK pub sector has experienced a recent revival in transaction activity and, as an early investor into community pubs, we have been tracking the success of Bravo Inns for some time.
“The transaction will increase our portfolio weighting in community pubs and demonstrates the value of our Hawthorn Leisure platform in identifying acquisitions that can deliver higher yielding sustainable cashflows with scale driven synergies. A further attraction of this acquisition is the quality of the pub estate and the pub partners.”
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