Close Ventures, a UK venture capital trust manager, has completed a profitable exit from Bold Pub Company, a chain of pubs in the north of England, and agreed to back its management team in another new venture.
Close said that Bold, a pub group in which it has invested £6.5 million since 2004, has generated an internal rate of return for the trust of 20 percent on the basis of today’s sale, to UK leisure operator Calco Midlands. Specific terms of the transaction were not disclosed.
The Bold Pub Company was formed in 2004, when Ken Buckley and Phil Dearden bought 10 freehold pubs, with the backing of Close. It now operates 29 pubs across the north of England and North Wales, with a further site in the development phase.
Close director Will Fraser-Allen told PEO that the firm had already provided £4 million of backing for Buckley and Dearden’ new venture, Bravo Inns – another pub group that has already acquired six freeholds. “This management team has shown exceptional ability identifying sites with potential and converting them into valuable businesses,” he said.
The VCT manager’s portfolio is split fairly evenly between reliable, mature, asset-backed businesses like cinemas, pubs and hotels, and higher-risk companies in the technology and healthcare sectors that offer a greater prospect of capital growth, with the aim of producing a steady dividend stream for shareholders.
Other pub investments include Churchill Taverns, Dunedin Pub Company and the Smiles Pub Company in Bristol.
Buckley said: “Close Ventures has built up considerable expertise in the pub industry ensuring they bring much more to the table than capital. Not all VCs can add such value.”