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Fri 16th Dec 2022 - Exclusive: Liberation Group boosts presence in UK mainland with Cirrus Inns merger
Exclusive – Liberation Group boosts presence in UK mainland with Cirrus Inns merger: Channel Islands and West Country brewer and retailer Liberation Group is to further boost its presence in the UK mainland, including operating in London for the first time, after agreeing a deal to merge with Cirrus Inns, Propel has learned. Cirrus, which was founded in 2011 and backed by the de Carvalho family, the controlling shareholder of Heineken, operates a 22-strong premium pub business which trades from south west London across to the Cotswolds. Its sites include the Admiral Codrington in Chelsea and The Punchbowl in Mayfair. The combination of the two business brings together a predominantly freehold estate of 137 pubs, made up of 79 managed and 58 tenanted sites, with an accommodation offering of more than 400 rooms, stretching from south west London to Bristol and the Channel Islands – making Liberation one of the biggest privately-owned premium pub companies in the sector. Propel understands that the merger gives the combined entity an enterprise value of circa £200m. The combined group, in which the Cirrus backers, including the de Carvalho family, will become shareholders, said it is well-placed to leverage its scale and expertise for the “benefit of the business, its customers and its suppliers in the UK and the Channel Islands”. Jonathan Lawson, Liberation Group chief executive, will lead the combined group, with Alex Langlands ‘Langy’ Pearse, the Cirrus Inns founder and chief executive, joining Liberation Group’s board as a non-executive director. Lawson told Propel: “You look at the way the estate sweeps from south west London through Surrey and Sussex, then through Hampshire and Wiltshire, Dorset and across, it absolutely works. There is no conflict with our existing estate, there is no overlap, it is entirely complimentary. Langy has hand-picked a high-quality estate of pubs. It also allows us to further infil in these regions. We are up at 79 managed pubs, which is a good scalable number that has still got room for growth. This step changes us in the league table of premium pub operators.” Liberation Group, which has been backed by Caledonia Investments since 2016, said it would now focus on delivering a successful Christmas for its teams and customers before commencing the integration of Cirrus Inns in the new year, which will be led by Jayson Perfect, its group managing director Pubs & Inns. At the same, Liberation Group has also agreed new, long-term banking facilities with three of its existing lenders, HSBC, Santander and NatWest. Lawson said: “Liberation Group, Cirrus and our respective majority shareholders share a very similar view of pubs and the unique role they play in our communities. Langy and his team have built a superb business, which we are incredibly proud to welcome into Liberation Group. This move is consistent with our strategy of focusing on freehold premium food led pubs with rooms and provides us with further volume growth for our highly successful and award-winning beers such as Butcombe Original, Liberation IPA and our brand-new Tall Tales Pale Ale. I would like to thank Liberation Group's majority shareholder, Caledonia Investments, for their support with this transaction.” Langlands Pearse said: “I have watched the development of Liberation Group over the last few years, and along with our major shareholder, the Heineken family, feel confident in the ability of its team to take the business forward. We are reassured that in Caledonia, we have found investors with the similar level of family values, ambition and long-term approach to build something unique, and I look forward to joining the board.” Liberation reported 28.3% like-for-like sales growth across its managed UK estate for the ten months to 26 November versus the same period in 2019, while UK Brewery on-balance volume volume growth for the same period was up by 12.6%. Commenting on trading this year, Lawson said: “Liberation Group has come out of the pandemic in a strong position, and despite the obvious headwinds for our customers, we are on course to deliver a strong year’s performance in both the Channel Islands and the UK. We have obviously seen significant pressure on our cost base, but we have worked hard with our suppliers to find solutions wherever possible and have balanced pricing decisions with initiatives to deliver value to our customers. As a result, we have seen a stable gross margin performance in our Pubs and Drinks business, with both showing progress vs 2019.” In December 2020, Liberation paid £31.2m to acquire 21 pubs from Wadworth & Co, which added 143 rooms to its estate. The company also operates the circa 40-strong Butcombe Brewery business. Graeme Smith and Craig Rachael of AlixPartners advised on the Liberation/Cirrus transaction.

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