Electra doubles money on pubs

The European private equity firm has sold a 78 per cent stake in UK pub operator Tom Cobleigh, realising £55m in what constitutes the first exit for its 2001 fund.

The Electra European Fund, a mid-market buyout fund closed in 2001 on E1bn and managed by Electra Partners Europe, has completed its first exit.

A 78 per cent interest in Tom Cobleigh, the Midlands-based UK pub operator, has been sold to Spirit Group, a privately owned business, in a transaction valuing the business at approximately £100m.

Electra invested £28m of equity when it first acquired the stake in the pub operator in September 2000. The firm acquired Tom Cobleigh from Rank Group at a time when, according to a statement from Electra, the business was “underperforming the market despite substantial capital investment by the previous owners.”

Post-acquisition Electra installed a new management team, which turned Tom Cobleigh’s estate of 110 pubs into two separated businesses, one managing pubs aimed at families and another concentrating on community pubs. Pubs not suited to either business were either transferred to the tenanted estate or sold. 

The exit constitutes an internal rate of return of approximately 30 per cent for Electra. The firm has been advised on the by Close Brothers, the independent corporate finance advisor, and law firm Clifford Chance.

Electra raised the E1bn European Fund in 2000 and 2001 following the completion of its own buyout from Electra Investment Trust. The fund has made six investments to date, most recently acquiring Oase, a German garden supplies manufacturer, in a E136m buyout.