THE WEALTHY scion of the Weetabix family has backed the management buyout of a company which specialises in transforming rundown pubs in the North of England.
MxP Partners, founded by Michael George after the sale of the cereal brand, bought Amber Taverns from Legal & General Capital in a deal worth £80m.
BlueBay Asset Management, part of Royal Bank of Canada’s global asset management division, also provided finance for the transaction.
Amber Taverns, based in Preston, owns and operates 95 pubs across the North, including 11 in Yorkshire. It employs around 1,200 people in total.
David Baer, managing director, told The Yorkshire Post: “We operate in an unloved sector of the market place.
“All pub companies are talking about food as the way forward and there are some great food pubs but what we have done is look at traditional pubs that focus on beer and we invest in the sites and provide great value for money on a consistent basis.”
Pubs have struggled to compete with supermarkets as the price of a pint has risen at the same time as grocers aggressively discount the cost of beer, added Mr Baer.
He said the company’s landlords are incentivised to engage with their communities and offer a great welcome to customers. They are paid a share of the pub’s takings.
He welcomed the backing of MxP and BlueBay as “a tick in the box for wet-led pubs, which a lot of commentators had written off”.
The involvement of international investors in a northern investment proposition is also significant.
Mr Baer said: “London is a great city and there is no point in denying that and it has got a lot of foreign money coming in, but outside of London is a fantastic opportunity.
“People still want to go out and have a pint and chat with their friends and colleagues and have fun.
“We operate right across the North and we find Yorkshire and the North in general a great place to do business.”
Amber Taverns launched in 2005 with three founding shareholders, including Mr George.
In 2010, the other two investors wanted to exit so the business was sold. It continued to grow under Legal & General Capital, adding another 40 pubs.
Mr George was interested in getting involved again and approached the management team, leading to an off-market transaction with MxP and BlueBay with debt provided by HSBC, said Mr Baer.
Paul Landsman, of Legal & General Capital, said: “The Amber investment has been a great example of LGC in action, benefiting policyholders, shareholders and wider stakeholders by backing best in class management, delivering market leading growth, and above all enhancing local communities through job creation and reinvestment in otherwise moribund businesses.”
Clive Preston, chairman of Amber, added: “The board is delighted to have a new partner to continue the buy and build strategy of the group.
“The continuing success of our business is proof that the traditional ‘wet-led’ pub is alive and well, and quality venues in a good location with a competitive offer will thrive.
“Our customers want to enjoy great pubs in their local community which offer value for money and which also screen the best sporting events and we are delivering exactly that.”
The company plans to grow the estate to 100 by the end of the year and has secured sites for a further five pubs over the next six months.
Mr George’s family sold Weetabix to US private equity group Hicks Muse for around £653m in 2003.