The deal, worth £100million, will fund acquisitions both in London and in other cities in the UK, expanding the 52-strong estate that is mainly in the capital but also includes the national Tiger Tiger chain.
Hutton Collins and LGV have backed the existing management team, led by chief executive Steve Richards. Non-executive chairman John Kelly will also remain with the business.
The funding will initially focus on doubling Novus Leisure’s central London portfolio over the next three years. This already includes the Balls Brothers sites that were acquired and revamped by Novus Leisure last year.
Looking further forward, the new owners believe Novus Leisure has the potential to expand outside its London core to cities such as Manchester, Bristol and Leeds.
In the year to June 30, Novus Leisure saw revenue growth of 25.5 per cent and profit growth of 51 per cent. Like-for-like sales for the year, covering 37 sites, were up 11.3 per cent, and on a two-year basis like-for-like sales were up 21 per cent.
The company said that its growth has been driven by its state-of-the-art booking system and a strong performance from new sites including the Balls Brothers estate. Profit has been further enhanced by focusing on high-margin events, expanding premium drinks ranges and extending trading hours.
Steve Richards said: “Novus has a resilient model that has served it well over the years. Our focus and investment in our pre-booked system has given us the ability to take market share and deliver predictable, high-quality earnings.
“These attributes have resulted in keen interest by the private equity community to invest in the next stage of Novus’s development, and in LGV and Hutton Collins we have secured investors who have an enviable record of backing successful businesses in the leisure sector. We really look forward to working with them over the next few years and to maximise the growth potential of Novus Leisure.”
Graham Hutton of Hutton Collins said: “Although Hutton Collins has not invested in this specific sector before, we have a depth of knowledge in the closely related dining sector, having previously made successful investments in PizzaExpress and Loch Fyne, and having significant continuing investments in Caffè Nero and Wagamama.
“When investing, we look for a differentiated product, strong growth prospects and a high-performing management team. Novus ticks all those boxes and we’re looking forward to helping the company to grow.
Bill Priestley, managing director of LGV Capital, added: “Novus has one of the best collection of bars and venues in the UK, which, together with its website, www.latenightlondon.co.uk. has enabled it to outperform its market and peer group for some years.
“We are backing a first-class management team, led by Steve Richards, and look forward to developing the business by growing the estate through acquisitions.
“This will be LGV’s fifth investment in the pubs and bars sector. We backed the original start-up of Enterprise Inns before it floated in 1995, co-funded the acquisition of The Unique Pubco, which was sold to Enterprise Inns in 2004, backed the 2008 management buy-out of The Liberation Group, the Channel Islands’ leading pub company and brewer, and acquired Amber Taverns, the northern community pub specialist in 2010.”
Zolfo Cooper advised Hutton Collins, NM Rothschild advised Novus and Deloitte advised LGV.