LDC sells NWTC pub chain to Graphite for £50m

The deal valued NWTC at £50m, following an off-market offer from Graphite to the vendors, which also included restaurants operator Living Ventures Group. NWTC chief executive Chris Hill and the senior management team reinvested a portion of their proceeds as part of the transaction and will continue to run the business.

LDC reaped a 6.1x multiple, equating to an 80% IRR over the relatively short three-year holding period. The firm had invested £2.7m for a minority stake in NWTC in 2013 through the Hill Capital Food & Beverage Fund.

Since then, the chain has expanded from two to 14 venues. Graphite stated it would look to help the management team pursue further UK expansion.

The buyer is no stranger to the dining sector: Graphite made more than 10x its original investment on the sale of Wagamama in 2005. It is also invested in Corbin & King, which operates London restaurants including The Wolseley, The Delaunay and Brasserie Zédel. Graphite also acquired upmarket steak restaurant Hawksmoor for £35-40m in 2013.

Meanwhile, the sale adds to LDC's sizable exits streak in recent weeks. Since the beginning of April it has reaped a 4x return on the trade sale of Property Software Holdings, a 2.4x return on the listing of Joules, 2.3x on the trade sale of Orion Media and 2.3x on the trade sale of Original Additions. Most recently, LDC sold UK clinical trial research business Synexus to US pharmaceutical company PPD for £178m after a one-year holding period, generating a 2.3x return. Exit proceeds over the past two years for LDC now total £1.3bn, according to the firm.

Company
Launching its first venue in 2011, NWTC was founded by Tim Bacon and Jeremy Roberts as part of the Living Ventures Group. It was spun out in 2013 as part of the transaction with LDC and Hill Capital, with Living Ventures remaining as shareholder.

The group is headquartered in Knutsford and operates 14 pubs and restaurants across the UK under five brands: The Botanist, The Oast House, Smugglers Cove, The Trading House and The Club House.

According to its most recent accounts filings, NWTC generated a £17.7m turnover in the year ending March 2015, with gross profit of £13m. Profit on ordinary activities before tax amounted to £1m.

People
Graphite Capital – Omar Kayat, Mudassir Khan (partners); Simon ffitch, Mike Tilbury (senior partners); Alex Mills, John Western (investment managers).
LDC – Tim Farazmand (managing director).

Advisers
Equity – Macfarlanes, Ian Martin, Emmie Jones, Tom Pedder, Malcolm Walton, Nicholas Page (legal); Wyvern Partners, Mike Barnes (debt advisory); Alvarez & Marsal, Adrian Balcombe, Christopher Powell, Dafydd Williams (financial due diligence); GK Political, Kirsty Allan (political due diligence); Intuitus, Brian Horsfield (IT due diligence); Arthur J Gallagher, George Minoprio (insurance due diligence).
Vendors – Alix Partners, Paul Hemming, Craig Rachel, Joe Tebbutt (corporate finnance); Pinsent Masons, Edward Stead, Thomas Shorten, Amie Norris (legal).

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• Topics
• Exits
• Buyouts
• UK / Ireland
• Consumer
• LDC
• Graphite Capital
• Secondary buyout
• United Kingdom