Revolution buys Peach Pubs for £16.5m
Bar operator Revolution has acquired the entire issued share capital of Peach Pub Company from its founders Lee Cash, Hamish Stoddart and Jo Eames for £16.5m.
Of this, £500,000 is contingent on the future performance of the business. Revolution described it as a "transformative" acquisition which would accelerate its growth strategy and "create a more balanced and diversified business".
Revolution said that Peach's greater exposure to daytime and mid-week trading sessions would provide a balance to its existing estate, which performs strongly in the evening and weekends.
It added that Peach pubs are located outside of larger town and city centres and have benefited from the rise in people working from home.
The acquisition will present further growth opportunities to Revolution in the leasehold food-led pub market, either in individual sites or in small groups. In addition, Revolution will continue to invest in its current portfolio of brands.
The entire operations team of Peach, led by Chris Stagg, will remain with Peach following the acquisition and will be incentivised to remain with the business over the longer term. Finance director Tony Bobath will assist in the integration of the acquisition.
Peach operates 21 leasehold pubs in the South of England and the Midlands with average weekly takings approaching £30,000. Its offer is positioned at affluent guests seeking a premium food-led pub experience. It also has more than 80 bedrooms across its portfolio.
Revolution operates principally under its 49-strong Revolution and 18-strong Revolución de Cuba brands. In the year ended 2 July 2022, sales were £140.8m.
In the year to 2 January 2022, Peach achieved a profit before tax of £2.7m. Trading since 3 January 2022 has been strong with like-for-like sales up over 10% compared to 2019.
The board said it anticipated 12-month site earnings before interest, tax, depreciation and amortisation (EBITDA) for Peach in Revolution's current financial year to be over £5m with central costs in the region of £3.5m on turnover of more than £30m.
Revolution said it anticipated "significant" cost savings from the acquisition, with estimated savings through increased buying power, business combination and improved systems of at least £1.5m.
Revolution's net cash position and trading performance allowed it to fund the transaction from its banking facilities. Following the acquisition, the group will have headroom on its bank facilities of more than £15m.
Rob Pitcher, chief executive of Revolution Bars Group, said: "This is an exciting and transformative opportunity for Revolution. It broadens our guest base, balances our day part sales and seasonality while providing another avenue for growth both organically and by acquisition."
He added: "We welcome the Peach team to Revolución where they can continue their excellent work delighting guests and seek continued personal development in a business with a multi-pronged strategy that has similar values, ambition, and drive for excellence, which Peach has clearly displayed over the last 20 years."
