Orchid Pub Company sale on cards after advisors appointed
It is thought Sapient Corporate Finance has been appointed to advise the food-led group, which was originally formed in 2007 when former owner, US private-equity firm GI Partners, acquired 290 pubs from Punch Taverns for £571m.
The group is now understood to be valued at around £300m, with 70% of its estate freehold.
M&C Report understands that the group is looking to attract new investment to take it through its next stage of development, with a number of private-equity firms thought to have already shown an interest in the business, which is led by Rufus Hall.
Private equity may either look to back the existing team, the majority of which have been with the group since its inception, or bring in an experienced operator.
Greene King has often been linked with a bid for the company, although it is thought that the group’s leasehold sites may temper its interest.
Food-led
Orchid has undergone two restructures in recent years, the last of which — at the start of 2012 — saw Deutsche Bank’s real-estate arm become its sole backer through a debt-for-equity swap.
As part of the move, Deutsche wrote off a chunk of Orchid’s debt in return for taking sole control of the company from GI Partners and fellow lender Lloyds, both of which departed the business.
It is thought that, since the restructuring, the group has seen impressive growth and now has three formats it believes are scalable going forward — its family-friendly All Inns brand, the Carvery format and the Pizza Kitchen & Bar (PKB) business.
The group is currently in the midst of a three-year, £20m capital investment programme.
Under Hall, the company has taken a number of steps to reposition itself as a more food-led operation, particularly gaining traction through its PKB business, where it has seen year-on-year trade at converted sites increase 38% on average, with the highest rise at 77%. It currently operates 22
sites under the format and has a further 18 conversions in the pipeline.
Orchid operates six All Inns outlets and has board approval for a further 24, with plans to eventually roll the format out to up to 70 sites.
