Greene King buys New Century Inns for £32.6m

Greene King, the Suffolk brewer and pub company, has bought North East pubco New Century Inns (NCI) for £32.6m.

The deal is to be financed from existing debt facilities and Greene King said it expected it to be earnings enhancing in the first full year of ownership.

NCI consists of 49 tenanted and leased pubs, 48 of which are freehold. The pubs are located in Northumberland, County Durham, Yorkshire and Derbyshire.

In the 12 months to October 2007, NCI generated a run-rate EBITDA of £3m.

In a statement Greene King said there were "a number of opportunities for value creation at NCI including the introduction of Greene King's systems, increased targeted capital investment into the estate, selected conversions from tenancy to lease and both overhead and purchasing synergies.

"Not only will this acquisition provide Greene King with a base from which to acquire further freehold pub assets in the North, but it also provides further distribution opportunities for Greene King's core ale brands - Greene King IPA, Abbot Ale and Old Speckled Hen."

Rooney Anand, Greene King's chief executive said: "New Century Inns' pubs are located across the North and North East, areas where we are keen to grow our presence.

"The licensees at New Century Inns will benefit strongly from having access to a flexible range of agreements, attractive product range and supportive management style."

Alistair Arkley, chairman of New Century Inns, added: "We had reached a point where further significant acquisitions were needed to scale the business up to the next level and we took the decision that the best interests of the shareholders and licensees at New Century Inns were served by joining a larger organisation such as Greene King.

"We look forward to seeing the pubs develop under Greene King's excellent stewardship."