Cinven buys Nomura pub chain

Enterprise Inns has obtained a two-year call option on Cinven's £2bn deal to purchase the Unique and Voyager pub chains from Nomura.

Nomura International has announced that it has sold its Voyager and Unique pub chains (Newco) to a consortium led by Cinven in a £2.013bn transaction. Enterprise Inns has made a £75m cash investment in the acquisition and will be granted a call option to purchase the remaining equity of Newco.

A consortium of private equity investors led by Cinven and which includes Morgan Stanley’s Princes Gate Investors and Legal & General Ventures (LGV), has subscribed for the remainder of the equity in Newco. The pub estate acquired consists of 4,189 pubs and is estimated to generate a full year EBITDA in excess of £220m.

Guy Davison, director at Cinven said he was happy with the acquisition, adding that he was pleased at the speed of completion. “We already had a good working relationship with Nomura as a result of the acquisition of William Hill in 1999 so we were able to proceed with the deal at a healthy pace. Both parties agreed that £2bn was a fair price for the companies.”

Enterprise Inns will receive a 16.8 per cent stake for its £75m investment. Enterprise Inns was advised by HSBC Investment Bank and Deutsche Bank. Morgan Stanley has acted as financial adviser to Newco, which received legal advice from Ashursts.

Newco is being financed by equity of £447m with the balance in debt, which includes £1bn in the form of Unique’s existing securitised debt. Cinven has contributed £235m of equity with LGV and Princes Gate investing £60m and £77m respectively.

Legal & General Ventures was the underbidder for Voyager when Nomura acquired the chain last year. Adrian Johnson, CEO at L&GV, said: 'We were very keen to get involved in this deal as we believe that this sector offers financial buyers good returns due to the strong cashflows that exist in companies like Voyager.'

Davison said that the short term strategy for the investment was to improve the profitability of the two pub chains. “We intend to proceed with the conversion of Voyager from a managed to a tenanted chain. We anticipate that this, coupled with an improvement of the two companies business operations, will lead to improved profitability at both Voyager and Unique.”