Patron, Heineken acquire Punch Taverns in £1.8bn EV deal

The transaction, which values Punch Taverns' equity at £403m, is part of a joint investment, which will see a total of around 3,200 pubs change hands. Patron Capital will acquire 1,300 pubs with Heineken acquiring the remaining 1,900 sites.

In a general meeting attended by 59.71% of Punch Tavern's shareholders, 99.62% of those in attendance voted in favour of the deal, with 0.38% voting against.

Vine Acquisitions, a joint venture between Patron and Heineken, had already acquired a 28.5% stake in the listed company for around £114m and received irrevocable undertakings totalling 52.3% of the ordinary share capital in Punch Taverns prior to the vote.

According to publicly available records, Punch Taverns is currently financed through two asset-backed debt packages. The first, totalling £851m, is secured against 1,895 pubs, while the second, totalling £566m is secured against 1,329 pubs.

Patron and Heineken submitted their bid in December valuing Punch Taverns' shares at 180 pence apiece. The GP's capital will be drawn from its fifth fund, a €949m vehicle that held its final close in July 2016.

The deal is expected to complete in H1 2017, subject to regulatory approval.

Previous funding
TPG Capital acquired the business in an £825m buyout from BT Capital Partners in September 1999. After acquiring 3,500 pubs from Allied Domecq, the business listed on the London Stock Exchange in May 2002.

Company
Founded in 1997 and headquartered in Burton-upon-Trent, Staffordshire, Punch Taverns is a leased pub business with a total of 3,200 locations. The business generated a turnover of £406.8m in the year ending August 2016, with EBITDA of £177.9m.

People
Patron Capital – Shane Law (senior partner, chief operating officer); Stephen Green (senior partner).

Advisers
Equity – Rothschild (corporate finance).

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