NIB Capital seals £500m Welcome Break acquisition

Defying the difficult conditions in the credit markets, Appia Investments, a consortium of investors led by NIB Capital, has acquired Welcome Break from Investcorp SA in a deal reportedly worth around £500m. NIB, through its European Infrastructure Fund I, has taken a 53% holding in the business, with co-investors ING and Challenger Life taking stakes of 29% and 14% respectively - the balance of the equity will be held by management.

Investcorp purchased Welcome Break in 1997 from Granada in a deal worth £476m, with debt facilities provided by Bankers Trust and Chase Manhattan. However, the company performed poorly in subsequent years. In 2004 Investcorp was forced to sell nine of the chain's buildings to property investor Robert Tchenguiz for around £270m, which formed part of a rescue deal that also included an emergency cash injection. In February 2007 the investor completed a £300m refinancing of the business, realising capital totaling approximately £150m and reducing its balance sheet exposure from around $143m to around $28m.

Welcome Break is a motorway service station company that operates a total of 27 outlets across the UK. The business operates three brands - Welcome Lodge, Days Inn and Days Hotel - and has an annual footfall of around 80 million. The company was founded in 1959 and is headquartered in Newport Pagnell. Darren Kite led the investment on behalf of NIB Capital.

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