Caledonia to acquire Liberation from LGV

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Friday 08 July 2016

Caledonia to make significant capital funding available to extend its footprint in the UK

Contracts have been exchanged for the purchase of The Liberation Group (“Liberation”) by Caledonia Investments PLC (“Caledonia”) from LGV Capital (“LGV”) for £118 million. Completion is expected over the course of the summer.

Liberation, founded in 2008 through a management buy-in led by Mark Crowther and equity backed by LGV, owns and operates a fully integrated pub and drinks business located in the Channel Islands and the West Country in the UK. Its business comprises 94 high quality managed and tenanted pubs, two award-winning breweries and three wholesale businesses. The breweries are located in Jersey and Bristol.

Liberation has grown strongly since 2008. During that time, the pub estate has increased from 65 to 94 outlets, and management has launched the Liberation Ale brand in the Channel Islands, where it is the market-leading brewer, wholesaler and pub operator.

In December 2014, Liberation acquired the Butcombe Brewery and pubs business located near Bristol as a platform for expansion in the UK. Butcombe owns 20 pubs in the West Country in village and suburban locations. Butcombe Bitter is one of the leading cask ale brands in the West Country, available in supermarkets and on draught in the on-trade.

Caledonia is backing the existing management team, providing an additional £40 million of funding for investment in its existing estate and acquisitions in both its heartland in the Channel Islands and the West Country. Richard Grainger will be appointed Chair of the Group Board following completion of the acquisition, succeeding Graham Turner who has served as Chairman since 2008.

Liberation was advised by Sapient Corporate Finance.

Liberation’s CEO, Mark Crowther, said:

“I would like to thank LGV and our Chairman, Graham Turner, for their advice and support during the last eight years. We are delighted to have a new partner to provide funds and insight to continue the growth of Liberation where expansion will be focused on the buy-and-build strategy in the UK whilst simultaneously growing and developing our business in the Channel Islands.

“Our customers want to enjoy great pubs with fabulous beer in their local community, offering value for money. We will continue to deliver that through investment, innovation and excellent customer service. We are excited about the next phase of our development and look forward to working with Caledonia on delivering further success for our new shareholders, employees and customers.”

Michael Mowlem, Managing Director of LGV, said:

“Liberation has been a high quality investment for Legal & General funds, supporting an excellent management team, delivering growth, and above all enhancing local communities in the Channel Islands and the West Country through job creation and investment. We have backed the business during a period of significant development, providing EBITDA growth every year of our ownership. We would like to thank the entire senior management team and all the staff for their hard work in making this a successful investment for all stakeholders and wish them every success for the exciting future offered under new ownership.”

Duncan Johnson, Head of Unquoted Investments at Caledonia, said:

“Caledonia has developed a strong relationship with Mark Crowther and his team over a number of years and we are delighted to become Liberation’s new financial partner. We are attracted to the business by its high quality pub estate and leading market position in the markets in which it operates. We believe that with Caledonia’s longer term support Liberation will be ideally placed to take advantage of growth opportunities, both within its existing estate and through further selective acquisitions. Liberation will complement the other defensive, asset-backed and cash generative leisure businesses in our unquoted portfolio. The investment will pay an attractive yield from inception.” 

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