Nightcap launches £3.5m fundraising bid to realise ambitions

By Gary Lloyd

- Last updated on GMT

Acquisition war chest: Nightcap CEO Sarah Willingham
Acquisition war chest: Nightcap CEO Sarah Willingham

Related tags Nightcap Multi-site pub operators Finance Property

Nightcap has announced its ambitions of becoming the UK’s leading bar group by creating a £3.5m war chest to take advantage of acquisition opportunities.

The Sarah Willingham-led business that owns and operates 46 bars including brands such as The Cocktail Club, Barrio Familia and The Piano Works, has proposed the issue of 70m new ordinary shares to raise the money and has already raised £750k through the issue of 15m ‘subscription shares’.

The company’s board believes its strategy of raising capital incrementally to satisfy each of its acquisitions, such as The Piano Works​ and Dirty Martini​, has been appropriate for its acquisitions to date.

However, to execute the company’s ambition of creating the UK’s leading bar group, it wants to strengthen its balance sheet, which will, among other things, enable it to be well positioned strategically when future consolidation opportunities arise.

Structural changes

The net proceeds of the fundraising, once completed, will be used to take advantage of acquisition opportunities that Nightcap expects to identify as a result of the structural changes taking place in the premium bar sector, strengthen the business’s balance sheet and for general working capital purposes.

Nightcap chief executive Sarah Willingham said: “We believe that a once in a generation, opportunity currently exists in the late-night bar sector to create a substantial market leading group of the most popular and much-loved late-night bar concepts.

“It was always our intention to position Nightcap as the preferred consolidator in the premium bar sector and with this fundraising we intend to continue our efforts to create the UK’s leading bar group.

“A combination of businesses struggling with significant debt from the Covid period, ongoing macro-economic challenges from the cost-of-living crisis and rail strikes have all escalated and accelerated the opportunity for consolidation, as we see a number of companies from across the sector considering their future strategic options.

Capable of doubling bar numbers

“It is core to our strategy to be present in the conversations that will shape the late-night bar sector in the UK as we approach the next economic cycle, with a more positive outlook on real wage growth, lower inflation, coupled with anticipated lower interest rates, which is expected to lead to an improvement in consumer confidence.

“Over the past 18 months, we have built a robust and professional management and leadership infrastructure at Nightcap and our team is capable of doubling the number of bars that it manages without the need for Nightcap to make significant further investment.”

Earlier this month, Nightcap said certain brands of the Revolution Bars Group – which launched a formal sales process​ of its business in April – could be an “excellent addition” to its portfolio​.

Nightcap has completed five acquisitions since 2021 and its board believes further opportunities will arise in the coming year “as the sector moves from incremental M&A activity to a more fundamental shift, as many of the operators in the sector are going through significant change”.

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