Private equity-backed gastro-pub group Geronimo Inns has acquired a portfolio of six pubs from major UK pub operator, Punch Taverns plc, in the latest phase of its buy-and-build strategy. Arrowpoint Advisory's Consumer team advised Geronimo on the deal.
Geronimo has taken advantage of the ongoing support of investors Penta Capital and a flexible capital structure to secure this exciting opportunity for expansion. At the time of Penta's initial investment in 2006, Geronimo agreed pre-committed roll-out facilities to enable it to continue to expand its then portfolio of 21 quality, food-led, managed pubs within London and the M25.
Geronimo is now deploying some of these facilities to take on six pubs from Punch Taverns. Building on the close relationships it developed advising on Penta's investment in the Company in 2006, Arrowpoint Advisory advised the Company on the acquisition, which will see Geronimo's portfolio expand to 27 pubs.
Rupert and Joanna Clevely founded Geronimo in 1995. Today, the Company has grown to become a unique collection of upmarket pubs, which offer great food and an eclectic selection of beers and wines in an ambience of relaxed informality. The Company is widely recognised as being an innovator in the pub industry, with a proven ability to turn poor performing pubs into "Oscar winners" and the new pubs will benefit from Geronimo's management flair and food-led offering.
Each of the Punch pubs is situated in a prominent location around London, complementing the spread of the other Geronimo pubs across its traditional footprint of London "villages". Each pub will be refurbished and customised to reflect its own particular local area, whilst retaining Geronimo's own inimitable "quirky" style. A significant capital expenditure programme of 1.5 million is planned, and it is anticipated that approximately 70 jobs will be created as a result of the transaction.
Simon Cope-Thompson, Managing Director at Arrowpoint Advisory, and head of the Consumer sector team, commented: “We have worked closely with Geronimo since advising on the original fundraising from Penta in 2006, and were delighted to work with the Company again to assist with this exciting and transformational acquisition.”
Daniel Domberger, Managing Director at Arrowpoint Advisory, added: “In the current climate, having supportive investors and the right capital structure is a clear advantage when considering acquisitions. Whilst many leveraged businesses are finding their freedom of movement constrained by inappropriate capital structures, building in flexibility at the point of investment can help make all the difference when the right opportunity emerges.”