GI Partners portfolio company Orchid has done its first of what it anticipates will be many deals to consolidate the struggling pub sector.
Orchid has paid an undisclosed sum for 10 businesses from Bar Room Bar, a 16-location pub chain Orchid had previously owned and sold for £20 million in 2007. Bar Room Bar subsequently collapsed into in April and has
Bar Room Bar: back in Orchid's hands
now sold back some of the assets for “considerably less” than their original purchase price, according to a source.
Orchid, which owns roughly 290 pubs, went through a financial restructuring in late 2008. HBOS, which financed the £571 million buyout of Orchid by GI Partners in 2006, drafted in the restructuring team with the management’s approval.
“We fully supported Orchid’s restructuring … because we felt confident in the group’s ability to adapt and evolve the business in line with current economic conditions,” GI Partners managing director Phil Kaziewicz said in a statement. “We are pleased to already be seeing the well thought out strategy paying off; not only benefiting the Orchid Group but saving businesses and hundreds of jobs in the process.”
The bolt-on deal comes as GI is raising its third fund, targeting $2.5 billion. The firm is nearing the $2 billion market at present, according to market sources.
GI, which has offices in Menlo Park, California and London, closed its previous fund on $1.5 billion in 2006.