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Wed 3rd Nov 2021 - Escape Hunt to acquire Boom Battle Bars for £17.38m
Escape Hunt to acquire Boom Battle Bars for £17.38m: Escape room operator Escape Hunt is set to acquire Boom Battle Bars, the adventure bar concept from the team behind trampoline park business Flip Out, for £17.38m. The deal will be satisfied by the initial payment of £9.88m in cash and deferred consideration through the issue of up to 25,000,000 consideration shares payable subject to an earn-out and will only be issued if the performance of the Boom Battle Bars group in the financial year ending 31 December 2022 meets a combination of turnover and site roll-out targets. Escape Hunt is also proposing to change its name to XP Factory “to reflect the changing nature of the enlarged group's business”. Escape Hunt stated: “The funds will be raised through a placing of new ordinary shares to raise £14.775m for Escape Hunt at 30p per share, of which £9.88m will be used to satisfy the cash element of the consideration payable for the proposed acquisition of Boom Battle Bar; a subscription of new ordinary shares to raise approximately £0.225m for the company at the issue price; and an open offer to raise up to a further approximately £2.2m for the company on the basis of one open offer share for every 12 ordinary shares held on the record date at the issue price. Boom Battle Bar is a fast growing experiential leisure business combining competitive socialising activities with cocktails and street food and currently comprises one owner-operated venue and five franchised venues in the UK. It has a significant advanced pipeline of 21 sites, where ten have already been signed, including two in build, and a further 11 sites which are expected to exchange within 30 to 90 days. The business has a total pipeline of 39 sites includes a further 18 sites with outline terms agreed. The total pipeline includes £12.6m of landlord contributions towards build, of which £7.6m relates to the advanced pipeline. Within the advanced pipeline, proposed owner-operated sites include prime sites in London in Oxford Street and the O2 Arena and 18 franchisees have already signed agreements to take on franchise sites. There is potential for co-location of Escape Hunt in several sites, with first co-located site at the Lakeside shopping centre in Thurrock already open. The acquisition is expected to be significantly earnings accretive and profitable in the first half of 2022. Each director, or an associate of each director, has conditionally agreed to participate in the fundraising. In aggregate, directors' subscriptions total £485,000. The company has been granted a two-year exclusivity period by MFT Capital to acquire Flip Out, a family focused leisure entertainment business and the UK's largest trampoline operator, on pre-agreed terms. The directors believe the acquisition presents an unprecedented opportunity to benefit from the trends in experiential leisure and take advantage of the conditions in the retail commercial property market to create in the enlarged group a business that has the potential to become one of the UK's pre-eminent experiential leisure businesses. Furthermore, the directors believe the opportunity for growth, cash generation and profitability is greater for the combined businesses than for the individual constituents and that there is the potential to generate operational synergies. Completion of the fundraising is subject, inter alia, to shareholder approval to enable the issue of the new ordinary shares, which will be sought at a general meeting of the company expected to be held at 10am on Monday, 22 November.” Escape Hunt chief executive Richard Harpham said: “We are excited to be acquiring Boom Battle Bars, which is highly complementary to our existing Escape Hunt business. The acquisition allows us to capitalise on the growth in experiential leisure and competitive socialising, and significantly improves our ability to access the best property locations in a soft commercial property environment. There are material potential benefits from co-location of sites in the same venues, which will enhance our combined site economics, and the businesses enjoy a strong overlap in target customer, offering attractive cross marketing and brand awareness synergies. The advanced pipeline of sites provides a secure runway for growth for both brands and the board believes the combination of the businesses will be able to exploit the market opportunity more effectively than either business on its own.”

Harrods restaurant workers set to go on strike as Knightsbridge store announces £68m debts: Dozens of restaurant workers at luxury department store Harrods are set to go on strike. The news comes as recently published accounts showed Harrods plunged £68m into the red last year after pandemic lockdowns halved its revenues. United Voices of the World, which represents Harrods’ waiters and chefs, said it was balloting members about a strike in Christmas week after demanding pay be raised from £9 an hour to a minimum of £12 an hour. Petros Elia, general secretary for UVW, told The Guardian: “Our members work in the most famous luxury department store in the world, and yet they are paid poverty wages while generating millions of pounds in profit for their bosses. Our members are not willing to tolerate this any longer.” The union said this was partly prompted by a heavy workload for staff after job cuts, with the number of staff reduced by 145 to just under 4,000. The company, whose owners collected £125m in the year to January 2020, said it was unlikely to pay another dividend for two more years but has more than halved spending to just under £45m. It also said, in accounts published this week, that the term of a £620m loan and a £200m credit facility repayable in April next year had been extended by 18 months. In a statement issued after the accounts were published, Harrods said they reflected the “devastating” impact of the pandemic on business, but healthy cash reserves and strong growth before the pandemic had “weathered the storm”. It stated: “We have a robust programme that will return the business to strength, and while we know recovery will take time, the early signs are very positive.”

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