Spirit Group (“Spirit” or “The Group”) announces that it has reached agreement with Punch Taverns on an all-cash acquisition of Spirit. The transaction values Spirit at £2.7 billion and will be subject to approval from Punch Taverns’ shareholders.
Spirit Group is one of the leading managed pub operators in the UK with over 1,800 pubs and 38,000 employees. The Group was formed in 1999 from the acquisition of the managed and leased estate of Allied Domecq and the subsequent demerger in 2002 from Punch Pub Company. Spirit doubled in size following the acquisition of 1,400 managed pubs from Scottish & Newcastle Retail in November 2003. Since then, Spirit has transformed the combined business through a focused rationalisation and intense concentration on the customer. The Group has two main businesses: Spirit Pubs and Bars, and Spirit Food. There is also a small R&D arm called DevCo, which incubates and trials new concepts that can be rolled out into the main estate.
Spirit recently announced like-for-like sales growth of 3.9% for the 12 weeks to 20th August 2005 with EBITDA growth of 6.3%. Food sales grew by 7.7% in the period and drink sales rose by 2.8%. Current trading is continuing this strong trend, demonstrating the success of Spirit’s trading strategy following the re-shaping of the business over the last 20 months. Spirit is owned by a private equity consortium, which includes Texas Pacific Group, Blackstone, CVC Capital Partners and Merrill Lynch Private Equity. Spirit was advised by Merrill Lynch. Merrill Lynch and Deutsche Bank also advised the shareholders of Spirit.
Karen Jones, Chief Executive of Spirit Group, said:
“I am extremely proud of what Spirit has achieved over the past six years, and particularly since the acquisition of SNR two years ago. It has been an eventful and enjoyable journey and I look forward to seeing our pubs and our people move forward as part of Punch Taverns, in order to fulfil their considerable potential.”