Regent Inns, the owner of the Walkabout pubs and Jongleurs comedy clubs, acquired a third leg yesterday with the purchase of the Old Orleans restaurant chain from Punch Taverns for £26m.
The deal reunites Regent's executive chairman, Bob Ivell, and the finance chief, John Leslie, with the Old Orleans chain which they ran when they were at Scottish & Newcastle, before it was sold to Spirit Group in October 2003 and then Punch.
The sale of the 31 outlets, of which 27 are short leasehold, forms part of the planned disposal of 380 pubs from the Spirit estate acquired by Punch in December which turned it into Britain's biggest pub group. It has already sold 290 to GI Partners for £571m, meaning there are 59 left after the Old Orleans deal. Punch said they would be sold piecemeal. It will use the sale proceeds to pay down debt.
"This gives us a cocktail-bar food operation and a third string to our bow," Mr Ivell said. "I know the business pretty well. I don't think it's been particularly high on Spirit's focus. Quite a lot of these businesses need a lot of care and attention and we can do it in a smaller set-up."
He said Regent had looked at a number of other businesses, including the Tiger Tiger owner Urbium last year but had decided it was too expensive. Urbium was bought by the venture capitalists Electra for £113m instead.
Mr Ivell said he was pleased with the price for Old Orleans, which has generated £2.3m in half-year earnings before interest, tax, depreciation and amortisation. The price is equivalent to five times annual Ebitda. In line with the Walkabout sports bar chain, Regent intends to revamp the Old Orleans restaurants as "sports diners". The company plans to refurbish the outlets and invest in staff training and marketing. Further acquisitions are possible.
Analysts at Altium said the Old Orleans deal reduced the chances of Regent falling to a predator in the near term and cut its share price target while maintaining a buy recommendation on the stock.Reuse content