Avebury set to balloon to 2,000-strong estate

by The PMA Team Avebury Taverns, the operator of 750 leased and tenanted pubs, plans to expand to 2,000-plus pubs after a management buyout backed by private equity firm Vision Capital. Several hundred millions of pounds in equity funding is now available to acquire large pub portfolios after Vision Capital bought Credit Suisse First Boston's (CSFB) controlling stake in Avebury. Avebury managing director David Myers, who, with fellow directors now owns 20% of the company, said: "This is the most important development for Avebury Taverns since we started the business in 1997. "We now have the structure in place to press ahead to realise our ambitious growth plans at a much faster pace. "Vision Capital has a strong track record of working with management to assist in the development of the businesses in which it invests. "This is its first investment in the pub sector and we believe that its involvement will be of considerable assistance to us as we pursue our strategy of growing through large-scale portfolio acquisitions. "There is a lot of movement in the market at the moment and we are now in a position to be a much stronger buying force. Another key element of our strategy is to continue upgrading the overall quality of the pubs in the estate. So we will certainly be most interested in the better quality packages that come on the market." Avebury Taverns recently unveiled profits up by a third to more than £9m for the year to 30 September. Last year 140 tenants signed new long-term leases. At the same time, the number of tenants and leaseholders joining the company's incentive and reward scheme, Avebury Advantage, rose to more than two-thirds of the estate, and during the year they earned more than £4m in incentivised discounts between them. Myers added that an Initial Public Offering (IPO) or securitisation were both routes for the company that would be considered in the medium term. Vision Capital's acquisition of Avebury is part of a portfolio deal with principal investment coming from funds managed by Goldman Sachs and Landmark Partners. Also included in the portfolio of businesses bought from CSFB is Elegant Hotels Group, a chain of five-star hotels in Barbados, and Roadchef, an operator of motorway service areas in the UK.