Hawthorn Leisure sold to NewRiver for £106m

May 25th, 2018 | Posted in: Uncategorized

Hawthorn Leisure has been sold to NewRiver REIT for £106.8m. The deal sees the group extend its pub estate from 331 to 629 sites and includes 97 Scottish pubs such as The Victoria Bar, Glasgow; The Jolly Gin and Craft, Falkirk; The Queens Park Cafe in Glasgow and The Grapes in East Calder.

The Hawthorn brand will be retained and over time both estates will be transitioned into a single operating platform. The acquisition will not affect the publicans or Partners of either portfolio and they will be able to continue on their existing agreements.

NewRiver chief financial officer Mark Davies said, “We’re delighted to announce this acquisition as we believe there are clear synergies between Hawthorn Leisure’s business and our own which is strengthened by a similar ethos and business culture. As well as being an excellent fit with our own estate, the Hawthorn Leisure portfolio presents obvious opportunities around scale. Importantly, Hawthorn Leisure operates mainly wet-led local pubs on a mix of leased, tenanted and managed models, and there’s very little geographical overlap with our sites.

“NewRiver is an ambitious, forward-thinking company, and we’ve been looking for some time to add to our pub portfolio through a large strategic acquisition such as this.  Our business is focused on the dynamic convenience and community-led retail and leisure sectors, and the Hawthorn Leisure acquisition provides this as well as further diversification, while strengthening our position as a major operator of pubs in the UK.”

Gerry Carroll, CEO of Hawthorn Leisure said, “The NewRiver acquisition is the best possible outcome for our people and 298 leased and managed pubs across England, Scotland and Wales.  The deal provides a strong platform for our ambitious growth plans and ensures we not only retain all staff and our head office, in Marston Green, but the Hawthorn Leisure brand and values that we live by.  NewRiver has bought into the Hawthorn Leisure team, as much as the pubs, so for us it’s business as usual.  As such, we will continue to support our Partners to achieve the best possible results and be famous for great people, great pubs and great propositions.”

NewRiver acquired its first portfolio of 202 pubs from Marston’s PLC in December 2013, followed by a further 158 from Punch Taverns in 2015 while Hawthorn Leisure was founded in 2014 through the acquisition of 275 Greene King pubs, and 88 from R&L. Since inception, the pub company has invested £13.5m in its estate, with a return on investment of 30%. In the past three years, Hawthorn Leisure’s like-for-like profit has continued to grow.

The two management teams are now in the process of conducting a full review of the operational structures of both portfolios, with the intention of combining best practices from each estate across all areas, including operations, purchasing, finance, marketing, supply chain and distribution. Of the 298 Hawthorn Leisure pubs 85% are leased and tenanted, and 15% managed.

David Shipton, asset development director for NewRiver’s pubs, said, “This is really positive news for both companies and their respective portfolios of community pubs and the customers that they serve. We are excited to begin this new partnership demonstrating our position as long-term investors in pubs. It’s important to note that all partners in both estates will be able to continue on their existing agreements, and where pubs are let on a tenancy-at-will (TAW) basis, we’ll look to attract partners on longer term, substantive tenancy and lease agreements.”

 

 

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Susan Young
Susan Young is a journalist who has spent the last 20 years editing the DRAM. Prior to that, she spent a decade working in Public Relations and Events dealing with clients as diverse as Cumbernauld Development Agency and James Burrough Distillers. Her knowledge of the Scottish licensed trade is extensive and she also instigated the first ever Scottish licensed trade awards which have evolved into the Scottish Bar and Pub Awards.


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