8th Apr 2016 10:12
LONDON (Alliance News) - Eclectic Bar Group PLC said Friday it has agreed to buy The Brighton Marine Palace & Pier Co, which owns and operates Brighton Pier, for GBP18.0 million in cash in a reverse takeover, after which it plans to change its name to The Brighton Pier Group PLC.
This comes one month after Eclectic - which runs bars for students and young professionals, but which has suffered of late from a reduction in that group's drinking habits - said it swung to a profit in the first half of its financial year ended December 27, reporting pretax profit of GBP300,000 and revenue of GBP10.7 million.
The move to profit corresponds with leisure entrepreneur Luke Johnson having joined the company as executive chairman in June, being the biggest shareholder at 18%. Johnson is best known for building up the Pizza Express chain in the 1990s, but also founded and is chairman of private equity firm Risk Capital Partners LLP which holds investments in Giraffe restaurants and the Patisserie Valerie chain.
Eclectic will fund the acquisition of PierCo partially through a share placing of 15.4 million shares at 55.00 pence per share, which raised GBP9.5 million in an accelerated bookbuild held on Friday morning.
Shares in Eclectic last traded at 59.00p, but have been suspended from trading on AIM until it has published an admission document and circular convening a general meeting, as the acquisition of Brighton Pier constitutes a reverse takeover.
At a general meeting of shareholders to be held on April 26, Eclectic said it will also seek approval to change its name to The Brighton Pier Group PLC.
Eclectic said the remaining amount is to be funded through a new GBP13.0 million debt financing agreed with Barclays Bank PLC, comprising of a GBP12.0 million term loan facility and a GBP1.0 million revolving credit facility. Eclectic said this replaces all current facilities available to the group, with the outstanding amount of its current revolving credit facility intended to be repaid within two months of the completion of the acquisition.
Brighton Pier hosts arcades, amusement rides, restaurants and bars and is the most popular visitor site outside London, according to Visit Britain. PierCo, the owners of the pier, reported revenue of around GBP13.3 million for the year ended October 31, up from GBP12.3 million a year earlier.
Eclectic laid out proposals for PierCo's integration, saying it would be a standalone division within the company and that improvements will be made to the catering and hospitality offering on the pier, including potentially seeking to bring certain food kiosk concessions from vendors in-house, as well as development for more family-friendly attractions such as a soft play area.
Eclectic noted PierCo will bring "substantial free cash flow" for the group, which could fund future acquisitions.
Eclectic added that once the acquisition is completed, Chief Executive Reuben Harley will step down from the board and intends to sell 1.9 million shares in a secondary placing. Chief Operating Officer Leigh Nicolson will take over from Harley over the coming months.
"We are very pleased to announce the acquisition of Brighton Pier, one of the most iconic and instantly recognisable attractions in the UK. The pier is hugely popular with the British public and it occupies a special place as a landmark at the heart of Brighton," said Chairman Johnson.
"This acquisition represents the next stage in the group's development, expanding the company's existing portfolio and using the enhanced board's diverse skillset to become a differentiated operator of leisure and entertainment assets," Johnson added.
By Hannah Boland; [email protected]; @Hannaheboland
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