slide1 n.
Skip this Video
Loading SlideShow in 5 Seconds..
Deal Landscape PowerPoint Presentation
Download Presentation
Deal Landscape

Loading in 2 Seconds...

play fullscreen
1 / 13

Deal Landscape - PowerPoint PPT Presentation

  • Uploaded on

Deal Landscape. Mark Sheehan Managing Director. Deal Landscape. Contents. 1. Background - early 2007. 2. Deal landscape. 3. Historical outlook for 2008. 4. Signs of change. 5. Credit Crunch. 6. Leisure sector. 7. 2008 – pipeline re-visited. 8. Recent activity. 9. Outlook….

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about 'Deal Landscape' - kimi

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

Deal Landscape

Mark Sheehan

Managing Director



1. Background - early 2007

2. Deal landscape

3. Historical outlook for 2008

4. Signs of change

5. Credit Crunch

6. Leisure sector

7. 2008 – pipeline re-visited

8. Recent activity

9. Outlook…

Strong UK economy with high consumer confidence and strong discretionary spend

rising house prices

low interest rates

low inflation

Strong investor confidence in the Leisure & Hospitality sector

High levels of structured funding available – mainly syndicated

Large deal sizes >£150million

Big Deal multiples on leasehold businesses

in excess of 10x run rate Ebitda

plus multiples of projected profit

Deals done to buy market share

1. Background - early 2007

Jun06 GI Partners buy 290 Spirit pubs from Punch for £571m

Jul06 M&B purchase 239 pubs from Whitbread for £497m at 11x ebitda multiple

Sep06 Greene King purchase Hardys and Hanson 268 pubs for £271m

Oct06 Admiral Taverns purchase 769 pubs from Enterprise Inns for £318m

Nov06 London Town purchase Petchley Pubs 167 pubs predominantly freehold for £94.6m

Nov06 Cinven acquire Gondola Holdings for £900m

Nov06 JT Davies Investments purchase Brakspear in a deal valuing the company at £106m at 19.8x underlying 2005 earnings

Dec06 Caffe Nero taken private by Saratoga for £235m at 15.1x ebitda multiple

Dec06Blackstone Group acquires Tragus Holdings for £267m at 10.7x ebitda multiple

(Bridgepoint, Kaupthing underbidders)

Jan07 Marstons purchase Eldridge Pope from Michael Cannon for £155m.

Mar07 R20 offer of 200p per share wins bidding war with Tragus and purchases La Tasca for £124m

Apr07 Admiral Taverns buy 869 leased and tenanted pubs from Punch Taverns for £326m

May07 Tragus Holdings (Blackstone) buy Strada for £140m. A price reflecting future growth (c£2.5m per site)

2. Deal landscape


Wagamama reported at £225m EV

Pret a Manger planned float in excess of £450m

Gaucho expectation in excess £100m

Tragus planned listing in Q1 2008

PPM – Paramount Restaurants rumoured IPO


speculated sale of Spirit by Punch Taverns

Whitbread Pub speculation


take out of M&B by Punch

Opco / Propco

intended Opco / Propco of M&B

Potential Conversion to Reit status

Enterprise Inns

Greene King

3. Historical outlook for 2008

Fundamentals in marketplace appeared wrong

leverage / gearing

property yields / interest rates

big deal multiples

US Sub Prime crisis reported

US economy stalled over widespread mortgage defaults

Libor spread over base rate increased

4. Signs of change

Spread %

Base rate

3m Libor

Rates %


Sep07 Northern Rock crisis

run on UK’s 5th largest mortgage lender

Jan08 Price of Oil rises to $100 per barrel

commodities prices worldwide increased

Early 08 Financial Markets in Turmoil

large falls in global stock markets

increase in inflation to +3% May08

falling house prices and negative equity

rights issues to shore up balance sheets: UBS, Lehmans, RBS, HBOS,

collapse of large financial institutions: Bear Stearns, Northern Rock

Jun08 Banks

say they are open for business

pretty much closed

5. Credit crunch

Dramatic loss of investor confident across the leisure sector

Smoking ban couldn’t have come at a worse time (Jun07)

Wet led businesses and late night licenses worst affected

Inflationary fears

Casual dining market proving to be more resilient to downturn

Best operators continuing cautious expansion

6. Leisure sector

Failed IPO’s due to continued volatility in the stock market and investors failing to meet the companies’ own valuations

Tragus and PPM planned listings have been put on ice investors baulk at £225m IPO valuation of Wagamama

Pret a Manger takeover by Bridgepoint Capital for £345m valuing the company at over £100m less than the intended IPO float value

Gaucho bought by Intermediate Capital Group valuing the business at an estimated £125m(?)

Reits not yet happened (Enterprise have go ahead, Greene King and Marstons on hold)

Regent Inns up for sale – share price crash


- £140m loss on Hedge

- Abandoned Opco / Propco

7. 2008 − pipeline re-visited


Abu Dhabi Inv Auth buy Hakkasan & Yauatcha for £30.5m

Richard Caring buys Soho House Group for £105m

Aguilo takes 5 of 8 Sports café sites out of administration


Bridgepoint acquire Pret a Manger for £345m


Quilvest PE buy YO! Sushi for £50m

Candu placed in administration

Novus Leisure buy 7 of 11 Soho Clubs & Bars placed in administration for c.£8m

Laurel Pub Co taken out of administration into Town & City Pub Company and Bay

Restaurant Group

8. Recent activity


Massive taken out of administration by Bridgehouse Capital

Summit placed in administration

Luminar sells 26 underperforming nightclubs to Cavendish Bars Ltd for a reverse premium


LGV Capital buy 65 freehold pubs in the Channel Isles from Duke Street Capital


Food and Drink Group share suspension

Currently over 500 pubs on the market from majors

Smollensky’s for sale again (sold September 2007)

Recent activity cont’d….


9. Outlook…

  • Prolonged credit crunch now looking like UK is facing risk of recession
  • Large decrease in M&A activity across all sectors
  • Increasingly difficult to fund deals
    • impossible to syndicate debt
    • perceived risk in sector
    • bank fees up and margin up (over Libor)
    • loan to value down
  • Deals done at much lower multiples of earnings and set to remain at current lower levels
  • Smaller deal sizes <£50m
  • Many companies now undervalued and represent good value acquisitions
  • Continued consolidation in the sector – led by both operators and PE
  • Activity based on strategic opportunities or distressed sale