Hawthorn Leisure, which has nearly 300 pubs and bars around the UK, has been acquired by leisure and retail property company NewRiver REIT.
With an enterprise value of £106.8 million, the deal will see Hawthorn Leisure’s estate combined with NewRiver’s to increase its size from 331 to 629 sites, although the Hawthorn name will be retained.
Hawthorn Leisure was founded in 2014 through the acquisition of 275 Greene King pubs and 88 from R&L, specialising in owning properties run by tenants and lessees although 15% are managed. It now has 201 in England and Wales and 97 in Scotland.
Gerry Carroll, CEO of Hawthorn Leisure, said: “The NewRiver acquisition is the best possible outcome for our people and 298 leased and managed pubs across England, Scotland and Wales.
“The deal provides a strong platform for our ambitious growth plans and ensures we not only retain all staff and our head office, in Marston Green, but the Hawthorn Leisure brand and values that we live by.
“NewRiver has bought into the Hawthorn Leisure team, as much as the pubs, so for us it’s business as usual. As such, we will continue to support our partners to achieve the best possible results and be famous for great people, great pubs and great propositions.”
Hawthorn Leisure’s latest projects include two pubs opened in partnership with leading Scottish operator PG Taverns. The Jolly Gin and Craft in Falkirk (pictured) reopened after undergoing a major internal refurbishment costing £300,000, including the introduction of an indoor Gin Garden draped in planting and its own wisteria tree. The Grapes in East Calder was reopened after a £130,000 refurbishment.
NewRiver has established itself as a long-term investor in UK pubs after acquiring its first portfolio of 202 from Marston’s in December 2013, followed by a further 158 from Punch Taverns in 2015.
NewRiver chief financial officer Mark Davies said: “We’re delighted to announce this acquisition as we believe there are clear synergies between Hawthorn Leisure’s business and our own which is strengthened by a similar ethos and business culture.
“As well as being an excellent fit with our own estate, the Hawthorn Leisure portfolio presents obvious opportunities around scale. Importantly, Hawthorn Leisure operates mainly wet-led local pubs on a mix of leased, tenanted and managed models, and there’s very little geographical overlap with our sites.
“NewRiver is an ambitious, forward-thinking company, and we’ve been looking for some time to add to our pub portfolio through a large strategic acquisition such as this.
“Our business is focused on the dynamic convenience and community-led retail and leisure sectors, and the Hawthorn Leisure acquisition provides this as well as further diversification, while strengthening our position as a major operator of pubs in the UK.”
The acquisition will not affect the publicans or partners of either company’s portfolio and they will be able to continue on their existing agreements.
David Shipton, asset development director for NewRiver’s pubs, said: “This is really positive news for both companies and their respective portfolios of community pubs and the customers that they serve.
“We are excited to begin this new partnership demonstrating our position as long-term investors in pubs. It’s important to note that all partners in both estates will be able to continue on their existing agreements, and where pubs are let on a tenancy-at-will (TAW) basis, we’ll look to attract partners on longer-term, substantive tenancy and lease agreements.”
Hawthorn Leisure was advised by law firm TLT on the deal.