LGV backs MBO at Amber Taverns

Private equity firm LGV Capital, the original backers of Enterprise Inns, has backed a management buy-out of Amber Taverns.

LGV has backed the existing management team of Clive Preston (chairman), James Baer (joint MD), Bryan Wardman (joint MD), Michael Norris (finance director) and Gary Roberts (operations director) in buying out its original backers Unicorn Asset Management, Acuity Capital Management and MaxCap Partners.

Amber said it could now double the size of its estate in the next three to four years.

It is LGV's fourth investment in the pub sector following its backing at the start of Enterprise Inns before it floated in 1995, co-funding the Unique Pubco, which was sold to Enterprise in 2004 and backing the management buy-out of the Liberation Group on the Channel Islands in 2008.

"The death of community pubs has been significantly over exaggerated in recent years and Amber is a perfect example of a business which has quietly gone about disproving the rule that pubs can only succeed where there is a food offering," said LGV managing director Bill Priestley.  

"From a start up in 2005, Amber has selectively expanded its estate and can now offer some of the best local pubs in the North. We, together with Amber's long term funders, Lloyds Banking Group, look forward to supporting the management team to expand the estate further over the next few years."

Priestley said he had been attracted by the strength of the management team and the quality of the pub estate.

Doubling up​

Amber Taverns' Chairman Clive Preston said: "The board of Amber Taverns Limited is pleased to announce the purchase of the entire issued share capital of Amber Taverns by LGV Capital and the Company's management team. This is an excellent result for all parties.

"For our original VCT backers Unicorn Asset Management, Acuity Capital Management and MaxCap Partners who have supported us for the last five years it provides a successful cash exit of 2.7 times their original investment and gives LGV, who already have a sound knowledge of our industry, a well established platform in the UK mainland licensed sector.

"Our management have taken a financial stake in the acquiring vehicle and are aiming to make it one of the fastest growing pub owner/operators in the UK.

"The team has the ability to double the size of the business in the next three to four years with the help and support of LGV.

"Our policy of purchasing carefully selected distressed or closed pubs in busy locations in the North of England and then making a significant investment in refurbishing them has been hugely successful.

"We add further value by featuring key sporting events on big screen TVs, and by selling premier brands at realistic prices."

Unique agreement​

Preston said Amber's Operator Agreement — under which managers are paid a percentage of their sales — was key to its success.

"Our Operator Agreement is already being used by other substantial pub companies and we believe it will gain increasing popularity in the industry in future years.

"Large managed houses will continue to work well on payroll but we believe our hybrid approach is the way forward for much of the pub stock in this country."

Preston recently hit out at the "big pub owners"​ for killing off outlets across the UK.

Christie + Co acted as property advisors for LGV.