Wolverhampton & Dudley Breweries was back on the acquisition trail yesterday - snapping up Southampton-based Celtic Inns Holdings in a deal valued at more than £43 million.
W&DB said it had acquired Celtic for £43.6 million on a debt and cash free basis from private equity firm Dunedin Capital Partners and existing management and employees of Celtic, subject to an adjustment based on net working capital at completion.
Ralph Findlay, chief executive of W&DB, said: "The acquisition represents good value for our shareholders and meets our returns criteria.
"Celtic has a good quality estate which complements our existing business both opera-tionally and geographically.
"The acquisition also represents an excellent opportunity for Celtic tenants to access W&DB's industry-leading agreements and a much wider brand portfolio."
W&DB expects the acquisition will generate annual purchasing synergies of £200,000.
The group added that the majority of the deal was satisfied in cash with certain employee shareholders receiving loan notes. The cash element was funded from existing bank facilities, the regional brewer said.
Celtic Inns, which was formed in 2002 by Duncan Murray and Clive Williams, has an estate of 70 community pubs based predominantly in South Wales, including 21 in Southern England.
The estate, of which approximately three quarters is freehold, comprises 63 tenanted outlets and seven
managed houses. Dunedin invested £3.5 million in Celtic Inns to generate proceeds of £8.7 million from its invest-m ent. Over the past 18 months, the estate has been increased from 47 pubs to 70.
Mr Murray, managing director at Celtic Inns, said: "Dunedin's provision of funding has assisted us in creating an estate of real scale and focus which has now attracted the interest of W&DB." Giles Derry, investment director at Dunedin added: "Celtic Inns has been an excellent investment for us, returning a money multiple of 2.4 times over 18 months."
The management team had done "a great job" in securing the sale of the business.
In December W&DB - the owner of the Pitcher & Piano, Bostin' Locals and Service That Suits Me chains - posted underlying pretax profits of £90.1 million for the year to October 1, up 16 per cent from the £77.7 million reported for the previous 12 months.
W&DB said the acquisitions spree that saw it take over rivals such as Burtonwood and Jennings over the past year, explained why its turnover during the period jumped 16.3 per cent to £597.3 million, along with the steady rise in like-for-like sales.
The company, a key player in the ongoing consolidation of the pubs industry, operates 1,748 leased and tenanted inns that form its Union Pub Company plus 542 managed inns grouped in its Pathfinder Pubs business.
W&DB paid £119 million for control of the 460 Burton-wood pubs and then followed this deal with a £45.8 million takeover of Jennings.