Greene King acquires Loch Fyne for £68.1m

Greene King, the brewer and pub operator, has announced it has acquired Loch Fyne Restaurants for £68.1m.

The deal for the 36-strong chain marks Greene King's first foray into the restaurant market.

It said that Loch Fyne had a number of strong developments in the pipeline and plans to increase its number of outlets by 20% in its current financial year.

The group also said that there was potential in the medium term to double the number of existing Loch Fyne sites, which would include the conversion of a number of its pubs.

About a quarter of sites currently operated by Loch Fyne, which was spun out of the eponymous Scottish oyster farm, are former pub locations, such as those located in Egham and Twickenham.

Loch Fyne's senior management team including Mark Derry, chief executive, will remain with the company.

In the 12 months to June 2008, Loch Fyne's pre-overhead Ebitda is projected to be in excess of £10m, and its post-overhead Ebitda in excess of £6m.

Greene Kings said it expects the deal, which will be financed from existing debt facilities, to earnings-enhancing in the first full year of its ownership.

Rooney Anand, chief executive of Greene King, said: "Loch Fyne is a high quality, well-respected British restaurant brand which gives us greater access to the premium end of the market and brings to our business further operational expertise.

"We have a strong track record of maximising the benefits from our acquisitions and this will be no exception: we greatly look forward to welcoming our new colleagues on board."

Derry added: "The tie-up with Greene King is an excellent development for Loch Fyne. It gives us the opportunity to capitalise on our already strong reputation and to accelerate the expansion of our business.

"We're delighted to have found a buyer who recognises our strengths and whose style of management fits so well with our own. We believe our customers and employees will have every reason to celebrate the agreement."

Loch Fyne was acquired by Hutton Collins in October 2005 in a deal that valued the group at about £30m.

Greene King has become the latest pub group to enter the restaurant market following Laurel Pub Company's acquisition of La Tasca and Ultimate Leisure's purchase of Bel & the Dragon.