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Tue 1st Jul 2014 - Breaking News - Johnson's Risk Capital makes third sector investment
Luke Johnson’s Risk Capital makes third sector investment: Risk Capital Partners, led by Luke Johnson and Ben Redmond, has made in its third current investment in the foodservice sector by buying a substantial minority stake in the 45-strong Brighton pub operator InnBrighton, which is led by chief executive Gavin George and chairman Gary Pettet, will be renamed Laine Pub Company. Propel understands that ownership of the company is now split fairly evenly between Risk Capital, management and Graphite Capital, which has rolled over its pre-existing stake in the company into a new fund. The Risk Capital investment in thought to be “rather less than” the £12m upper limit it sets on investments. The InnBrighton investment joins Gail’s Bakery and Red Hot World Buffet within the current Risk Capital Partners portfolio. Patisserie Valerie, now floated on AIM, Grand Union and Draft House are all personal investments made by Johnson and sit outside the Risk Capital portfolio. A source close to Risk Capital told Propel: “There are 50,000 plus pubs in the UK and some smaller pubs with low income will continue to close. But well-invested, well-located pubs have a good future. We think InnBrighton has a good operating model and a good portfolio of pubs in Brighton, and a nascent presence in London.” InnBrighton operates a mix of freeholds, free-of-tie leases and tied tenanted pub company sites, with an estimated eight Enterprise Inns sites. “There is a decent mix of owners across the portfolio,” the source added. “Certainly the management attitude at Enterprise is changing and the relationship is an important one for the company.” InnBrighton acquired its sixth London pub at the start of this year, the leasehold of a pub in South London previously known as The Battersea Mess and Music Hall, to add to its estate of 44 sites. “We intend to grow the estate in London and Brighton,” the Propel source added. Commenting on the transaction, Ben Redmond, co-founder of Risk Capital Partners, said: “Over the past seven years, Gary and Gavin have refocused the business successfully and developed a profitable estate of highly distinctive city pubs. The company has a strong pipeline of new opportunities in London and is well-positioned to continue to grow the business in the future.” Graphite partner Omar Kayat added: “The management team has a proven track record in acquiring underperforming pubs and improving them. We look forward to continuing to work with them under the Laine’s banner as they further develop their London estate of unique pubs and their exciting range of beers. We are very pleased to have Risk Capital on board for the next chapter in this group’s exciting story” commented Laine’s chairman Gary Pettet. “Their experience in our sector will be invaluable and we are very much looking forward to working with them to grow the business and to maximise the value to our customers in an ever changing market.” Commenting on the plans for the business, Gavin George said: “The name change reflects both our pride in our Brighton heritage and the growing importance and popularity of the beer we produce under the Laine’s badge. The skilled brewers in our three micro-breweries have created some highly individual beers of excellent taste and quality, which have provided both a significant point of difference with our competitors and an engaging offering for our customers. Since we opened our first Brighton pub in the mid-nineties, our success has been predicated upon the creation of inspiring ‘third places’ that positively impact the culture, community and climate of the localities in which we operate. We think the same is being achieved in the estate of six pubs we have built in London over the last two years and, with the backing of Risk Capital and Graphite Enterprise, we believe the prospects for Laine’s to achieve greater success are tremendous.”
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