NewRiver buys Bravo Inns for £17.9m

By Alice Leader contact

- Last updated on GMT

Looking forward: NewRiver aims to convert more leased and tenanted pubs to operator managed
Looking forward: NewRiver aims to convert more leased and tenanted pubs to operator managed

Related tags: Hawthorn leisure, Bravo inns

Hawthorn Leisure has ramped up its managed estate after its owner – NewRiver – acquired community pub company Bravo Inns Limited for £17.9m, which represents an EBITDA (earnings before interest, taxation, depreciation and amortisation) multiple of 6.8x.

Hawthorn Leisure’s estate of 660 pubs currently represents around 22% of NewRiver REIT, with the FTSE 250 company’s pub arm the seventh largest tenanted pub operation in the UK, according to Hawthorn Leisure chief executive Mark Davies.

Predominantly located in north-west England and trading under the operator-managed model, Bravo Inns’ 44 wet-led community pubs aim to complement Hawthorn Leisure’s existing community pub portfolio.

A recent revival

Davies 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.”

As reported by The Morning Advertiser,​ NewRiver revealed net property income from its pubs rose to £13.6m in the six months to 30 September – a 27% increase versus the same period in 2018 when the figure hit £10.7m.

This included net income growth from operator managed pubs of £2.6m – from £6.8m to £9.4m – due to selective site acquisitions and growth capital investment.

The Bravo Inns acquisition will increase the number of operator managed pubs in Hawthorn Leisure’s portfolio to 98, representing 14% of the entire Hawthorn Leisure pub portfolio.

Scale driven synergies

The company has undergone a programme to convert a number of its leased and tenanted pubs to operator-managed this year, delivering a return on investment in excess of 30% on conversions.

Davies continued: “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 high-yielding sustainable cash flows with scale-driven synergies.

“A further attraction of this acquisition is the quality of the pub estate and the pub partners. We look forward to welcoming Bravo Inns and its pub partners to Hawthorn Leisure.”

Successfully exited

Bravo was founded in May 2007 by Ken Buckley and Philip Dearden with financial support from Albion Capital. In early 2007, Buckley, Dearden and Albion successfully exited Bold Pub Company, an estate of 30 pubs.

Following completion of the sale to NewRiver, Buckley will continue as a consultant to the business and the Bravo Inns name will be retained in each of the pubs. 

Buckley said: “We have long been passionate supporters of pubs operating in the heart of the community, led by talented operators ensuring customers are the absolute focus. 

“I am delighted to announce today’s sale of Bravo to Hawthorn. It is clear we share the same commitment to community-based assets and I look forward to developing the business further under its ownership.” 

Sharing values

The expectation is that the business will benefit from funding from Hawthorn to grow the brand further in its heartland of north Cheshire, Greater Manchester, Staffordshire, Lancashire and Cumbria.

Albion Capital managing partner Will Fraser-Allen said: “It has been an immense privilege working with Ken Buckley and Phil Dearden for over 15 years as they successfully built Bold Pub Company and then Bravo. 

“Such a long relationship is rare and is testament to the quality of these businesses and the team that created them.” 

Related topics: Other operators

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