subject: Youngs Brewery Take Geronimos In 60 Million Scalping [print this page] Youngs Brewery today announced that it has bought the Geronimo Inns business for 60 million in cash, financed by a new 5 year 100 million facility provided by RBS and Barclays.
The Geronimo business was started 15 years ago by Rupert Cleavley, who will be joining the Youngs board, and his wife Joanna, who will retain her design brief. Geronimos is a gastro-pub business currently operating 22 pubs in Central London, three at Heathrow and one in Surrey. The Cleavley's are respected as innovators in the industry and they bring this to Youngs.
Geronimos had an EBITDA of 6.1 million for the year ended June 2010 and is on course for an EBITDA of 8.2 million in this FY. The sale releases cash to the Cleavleys and also to Penta Capital, who have backed the business for the past 4 years, but through a time where the business has run hard to make little progress.
Youngs will benefit from a 20% increase in the number of managed premises from 122 to 148. The acquisition of a new format will help Youngs get the most benefit from each location it trades in. The influx of talent across the board promises to energise the growth of Youngs.
Within the estate there are 10 freeholds - Castle (Islington, N1 9HF), Curtains Up (Barons Court, W14 9HR), Duchess of Kent (Islington, N7 8PR), Eagle (Shepherd's Bush, W12 9AZ), Elgin (Kensington, W11 1PY), Lord Palmerston (Tufnell Park, NW5 1HU), Northcote (Battersea, SW11 1NT), Phoenix Victoria (Victoria, SW1E 5JA), Prince Albert (Battersea, SW11 4PF) and Red Barn (Blindley Heath, RH7 6LL).
There are 13 leaseholds - Adam and Eve (Bloomsbury, W1T 3QQ), Betjeman Arms (St. Pancras International Train Station, N1C 4QL), Builders Arms (Chelsea, SW3 3TY), Bull (Westfield, W12 7SL), Clarence (Whitehall, SW1A 2HP), Coat and Badge (Putney, SW15 1NL), Crown (Bow, E3 5SN), Duke of Clarence (Kensington, SW5 0BE), East Hill (Wandsworth, SW18 1AA), Fentiman Arms (Oval, SW8 1LA), Kings Head (Winchmore Hill, N21 1BB), Phoenix (Chelsea, SW3 4EE), White Horse (Broadgate, EC2M 2QA). They also operate 3 concessions at Heathrow.
Youngs expects the acquisition to enhance earning immediately due to the cost savings which will arise from saving duplication, possibly 1.5 million of Geronimos 3 million overheads.
Stephen Goodyear, Chief Executive of Young's, said:
"The acquisition fits very well with our expansion strategy which is focused on high quality, food-led, managed houses in the London area, a strategy that we will continue to pursue with both the Young's and the Geronimo formats. Geronimo's team also brings considerable expertise in the operation of leases and concessions in high footfall retail locations such as airports and shopping centres and this represents a new growth opportunity for us.
Rupert Clevely, Chief Executive of Geronimo, added:
"Young's is the perfect home for Geronimo and I am delighted that the Young's Board wants to continue to embrace and retain Geronimo's inimitable DNA. Key to our success is the entrepreneurial flair and individuality, proven food expertise and home-from-home hospitality for which Geronimo is renowned and which our customers will continue to enjoy.
"The continued involvement of my trusted team will ensure that Geronimo's unique spirit will be maintained and that the Geronimo footprint will develop alongside and as a complement to Young's as the combined business looks to expand both formats. "
