C&C’s equity investment of £37m will represent 47% of the issued capital of Admiral and will be funded through the drinks producer’s existing facilities. Admiral will be accounted for as an associate of C&C.
Proprium, according to The Morning Advertiser’s sister title MCA, has been linked with an Admiral deal for some weeks and reported the value of the pubco to be in the region of £220m.
The investment will allow C&C direct access to 845 pubs across England and Wales through a procurement and supply agreement, the company said in a statement today (4 September).
It will allow C&C to enter a “resilient and growing” earnings stream from a “quality, tenanted” pub estate, it added.
Some 95% of Admiral’s pubs are freehold or long leasehold and are based in predominantly suburban or city locations.
Commitment to the pubco
C&C is now planning a long-term commitment to the pubco, which offers attractive returns on investment.
It is believed the management team at Admiral will remain in place, with C&C holding them in high regard.
C&C chief executive officer Stephen Glancey said: “The local pub remains at the heart of many suburban and city communities – often the hub of local activity and their economic and social contribution is immeasurable.
“C&C has a long and successful track record of supplying and providing financial support to local pubs within the independent free trade in Scotland and Ireland.”
Tenanted pubs were a key component of the pub sector and when well invested in, with the right operators and product range in place, could provide sustainable returns to all involved, he added.
“Admiral management has a proven track record in balancing these returns with the needs of their tenants and consumers. Today’s new arrangements will enhance choice for both tenants and consumers and provide a platform for further growth at Admiral,” said Stephens.
“For C&C, this is an attractive opportunity to create a new long-term investment in the important on-trade channel, without taking significant financial and operational risk.
'Enhance on-trade penetration'
“The investment will provide our brands with improved distribution in some of the best community pubs across the UK, with an opportunity to enhance on-trade penetration further over time.”
Admiral issued a statement today confirming it had reached an agreement with C&C Group and Proprium Capital Partners for the two businesses to acquire the pubco in a joint venture.
It confirmed the Admiral management team, led by chief executive Kevin Georgel, would remain in place.
Georgel said: “Recent years have seen Admiral Taverns go from strength to strength and I am delighted that with the support of our new investors we will have the platform in place to continue our development and execute our growth plans.
“Today, our nationwide estate of community pubs showcases the supported-tied model at its best. Through our distinct and award-winning operational approach, our dedicated and passionate team has worked hard to build strong and enduring relationships with our licensees.
“Our strategy remains unapologetically consistent and I look forward to working with the support of our new investors to continue to build on the significant progress the business has made over the past five years and take advantage of the opportunities within our markets, as and when they arise.”