18th Jul 2005 10:56
Punch Taverns PLC18 July 2005 PUNCH TAVERNS PLC ("Punch" or "the Group") Acquisition of Avebury Holdings Limited ("Avebury") Introduction Punch Taverns plc announces it has agreed to acquire the entire issued sharecapital of Avebury Holdings Limited. The acquisition values Avebury at approximately £219 million including theassumption of approximately £120 million of external debt. The cashconsideration for the acquisition is expected to be funded out of existingresources and proceeds from the forthcoming refinancing announced on 1 July2005. The acquisition is expected to complete on 5 August 2005. Information on Avebury Avebury, a private company, operates a leased and tenanted pub estate of 409pubs located throughout England and Wales. Over 95% of the estate is freehold orlong leasehold and it primarily consists of "community" local pubs. Avebury was formed in 1997 and has acquired over 900 tenanted and leased pubsover the last eight years, including portfolios from Bass, Whitbread, Scottish &Newcastle and Wolverhampton & Dudley Breweries. With support from Vision Capital, an independent investment firm, Aveburyunderwent a management buyout in 2004 which prompted a strategic review of thebusiness and churning of the estate, resulting in the current portfolio of highquality, cash generative pubs. In June 2005, 253 smaller, lower-yielding pubswere sold to Admiral Taverns and a further 32 pubs to Filmbridge Limited earlierthis month. As at April 2005, Avebury's unaudited balance sheet gross operating assets were£171 million. In the year to April 2005, Avebury generated unaudited houseprofit of £22.2 million (before central costs and overheads). Effect and benefits of the acquisition As at 5 March 2005, the Punch estate comprised 7,800 pubs located nationwide,and the Group has a clear strategy of expansion through a combination of organicgrowth and targeted acquisitions. This acquisition represents an attractiveopportunity for the Group as the Avebury estate consists of high quality outletswhich will complement Punch's existing estate and provide significantdevelopment opportunities. Furthermore, following integration, synergies areexpected to be generated from purchasing benefits and other cost savings. Theacquisition is expected to be earnings enhancing in the first full year ofacquisition. Consideration and financial effects A wholly owned subsidiary of Punch is acquiring Avebury. The acquisition valueof approximately £219 million includes the assumption of approximately £120million of securitised bonds. In addition, Punch expects to acquireapproximately £26 million of cash balances. The cash consideration for the acquisition of approximately £125 million isexpected to be funded by existing cash resources and proceeds from theforthcoming refinancing announced on 1 July 2005. Current trading The Group's pubs continue to see steady growth and are trading well and in linewith management expectations. Giles Thorley, Chief Executive of Punch Taverns plc, commented: "The acquisition of Avebury is further evidence of Punch's ability to acquireattractive pub assets in a competitive market. Avebury is a natural fit withPunch's existing pub portfolio and brings further geographic spread anddiversity from a high quality estate. Moreover, the acquisition brings with itadditional synergy benefits for the enlarged group as well as an investmentopportunity for the future. The Avebury estate will deliver good returns fromthe outset and has attractive potential for further growth." 18 July 2005 Punch will be hosting a conference call for analysts at 13.30 hours today.Please call Jamie Ramsay at College Hill on 020 7457 2048 for dial-in details.A brief presentation will be posted on the Punch website (punchtaverns.com)shortly before the conference call. ENQUIRIES: Punch Taverns plc Tel: 020 7868 8903 Giles Thorley, Chief Executive Robert McDonald, Finance Director Citigroup Global Markets Tel: 020 7986 4000 David Wormsley Anthony Gutman College Hill Tel: 020 7457 2020 Justine Warren Matthew Smallwood Citigroup Global Markets Limited is authorised and regulated by the FinancialServices Authority and is acting as financial adviser to Punch Taverns plc andfor no one else in connection with the acquisition and will not be responsibleto anyone other than Punch Taverns plc for providing the protections afforded toits clients or for giving advice in relation to the acquisition. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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