Young's adds 15 pubs with Redcomb acquisition

Young & Co.’s Brewery announced the acquisition of Redcomb Pubs - a company that owns and operates 15 pubs in “prime” locations - for £34m on a cash-free and debt-free basis on Wednesday.

The AIM-traded firm said the Redcomb business currently generated run-rate EBITDA of about £4m.

It said investment in the pubs was planned over the next two years, which would naturally have a short-term impact on profitability but “should” have a positive impact thereafter.

Young’s said that in the first full year of ownership, the pubs were expected to trade at the current run-rate, subject to the impact of any investments undertaken.

The pubs would complement the Young’s managed house estate, the board said, both in and around London, as well as build upon its “growing presence” in the South West and further enhance its brand.

Each of the pubs had a premium offering and distinctive personality that differentiated it in its local market.

As a result of the transaction, the Young’s managed estate had increased by 8% from 185 to 200.

With 70 tenanted pubs in its Ram Pub Company, the total Young’s pub estate would increase to 270 pubs.

The acquisition was financed through existing debt facilities with Barclays and HSBC, with Young’s saying it retained a “strong” balance sheet following the acquisition, and a “robust” long-term financing package.

“The team at Redcomb, headed by Dan Shotton and Mark Draper, has created an outstanding, well-invested estate of pubs, which we are delighted to add to the Young’s fold,” said chief executive Patrick Dardis.

“The acquisition of these pubs represents an excellent opportunity to continue the growth of the Young’s managed estate.”

Dardis said the pubs fit “very well” with Young’s expansion strategy, which was focussed on high-quality managed houses.

“These pubs are all in prime locations, where our premium offer will work extremely well.”