Capital buys two London Puzzles
Capital Pub Company has bought Puzzle Pub Company's two freeholds pubs in central London through Coffer Corporate Leisure (CCL).
Both pubs are currently named The Puzzle Pub and they are located on Garratt Lane in Earlsfield, and on the Fulham Palace Road in Hammersmith.
The total consideration payable by Capital Pub Company is up to £5.75 million.
This comprises £5.5m in cash at completion and a further £250,000 of deferred cash consideration which is payable 12 months later, conditional on the performance of one of the pubs in that period.
These two high barrelage Puzzle pubs generated combined turnover of £1.8 million on an annualised basis for the year to the end of August 2007, which the Board feels confident in further improving.
In addition, Puzzle Pub Company Limited, which has remained in the ownership of the vendor, has subscribed in cash for 157,729 new ordinary shares in the Company at 158.5p per share.
The Capital estate now comprises 26 free houses in London, all but three of which are freehold.
Capital Pub Company has secured an additional £8 million of bank funding with Allied Irish Bank over 10 years from which the transaction is being financed. This brings the total loan facility to £40 million of which £4 million remains unutilised and £20 million has been hedged at an average funding cost of 6.31% including bank margin.
David Bruce, chief executive of Capital Pub Company, said: "These Puzzle pubs are exactly the type of pubs that we seek to buy. They are freehold and have their own character and local customer base. The acquisition of these pubs will complement our existing portfolio perfectly."
Paul Tallentyre, Pub sector specialist at CCL, said: "This was a rare offering in a market where there is a lack of quality freeholds. This sale demonstrates that we can still achieve fantastic prices; it was a good deal for both parties, Puzzle achieved a good price whilst Capital acquired both EBITDA and freehold assets."
