Caledonia Investments buys Liberation pub company for £118m

Investment trusts company Caledonia Investments agreed to buy Liberation, a pub and restaurant business from LGV Capital, part of Legal & General, for £118m.

Caledonia said they will invest £70.6m in cash and acquire a 98% equity stake. Liberations’ management team will subscribe a further £1.4m.

The purchase of the Channel Islands based company will be funded by bank debt of £51m, which Caledonia said it will underwrite in the event that it is not in place by completion.

Liberation reported earnings before interest, tax, depreciation and amortisation (EBITDA) of £10.6m for the year ending 30 January. It had gross assets of £112.8m.

Caledonia's said it will yield organic growth by targeted capital expenditure within the pub estate and acquisitions of both individual pubs and pub groups in the south of England.

The acquisition is subject to approval of the Channel Islands Competition and Regulatory Authorities. Richard Grainger, previously chairman of, Close Brothers Corporate Finance, will become chairman.

Liberation had 94 freehold pubs in the Channel Islands and south west of England, two breweries, Liberation Brewery in the Channel Islands and Butcombe Brewery in the mainland, and three drinks distribution businesses.

Duncan Johnson, Caledonia's Head of Unquoted Investments, said: "We believe that with Caledonia's longer term support Liberation will be ideally placed to take advantage of growth opportunities, both within its existing estate and through further selective acquisitions.

“Liberation will complement the other defensive, asset-backed and cash generative leisure businesses in our unquoted portfolio. The investment will pay an attractive yield from inception."

Liberation chief executive Mark Crowther said: "Following LGV's successful period of ownership, we are delighted to welcome Caledonia as our future new owner. We believe that with Caledonia's financial support and long term investment horizon, we can continue to build on our justifiable reputation for quality products and service and extend our market leading business further into the UK mainland."

Shares in Caledonia Investments rose 0.18% to 2,254p at 1440 BST.