The deal sees Fortress acquire 100%, along with existing management, of the share capital of Punch owner Vine Acquisitions from Patron Capital Partners.
The transaction has been entirely funded by equity from funds managed by Fortress affiliates with no additional debt finance, with existing management maintaining its equity ownership.
Punch, which is led by CEO Clive Chesser, has a 1,300-strong estate across the UK and acquired 56 pubs from Young’s Ram Pub Company for £53m in July.
Exploring other opportunities
Last month (November), there was speculation the deal would be taking place but at that time, both parties refused to comment.
Fortress Investment Group managing director Cyril Courbage said: “We are excited to team with Clive and the Punch management, which has done an exceptional job of navigating the challenges of the Covid crisis while positioning the business for long-term growth and value creation.
“We believe in providing strong management teams with the flexibility and support to execute their long-term strategic plans.
“The UK is an extremely attractive investment environment and we will continue to explore other opportunities in this sector and across the UK, Ireland and Europe.”
Fortress already has a stake in the UK alcohol sector following the December 2019 purchase of Majestic Wine and the company had previously been in the running for a bid on supermarket business Morrisons.
Punch boss Chesser said the news was positive for everyone connected with the pub company and the business was excited about the opportunity that lies ahead.
He added: “Fortress is a hugely experienced investor, which understands the strengths of our business and fully buys into our strategic positioning and business plan.
“We welcome its ambition and commitment to work alongside the existing management team to invest in the business with innovation and capital to ensure our long-term success in what is a highly competitive market.
“I would like to take this opportunity to thank the teams at Patron Capital and May Capital for the outstanding backing provided during the ownership of the business. The support has been invaluable over the past four years, none more so of course than during the pandemic.”
Punch was described as a “fantastic business” by Patron Capital senior partner Stephen Green, who also wished Chesser and the teams well for the future.
Rothschild and Co and HSBC advised Fortress with Sidley Austin providing legal advice. Barclays Bank PLC and Hogan Lovells advised Patron.