Greene King sells 275 pubs for £75.6m

Pub company Greene King has sold 275 "non-core" pubs to Hawthorn Leisure Limited for £75.6m.

The group announced the deal this morning and said the pubs generated £12.4m for the business last year, implying a disposal multiple of 6.1x EBITDA.

While the pubs were sold to Hawthorn, which is backed by Avenue Capital Group and May Capital, for £75.6m, they had a book value of £93.8m.

Greene King and Hawthorn Leisure have also agreed a three-year beer supply deal for the pubs.

Rooney Anand, Greene King chief executive said: "We are pleased to have agreed this transaction with Hawthorn Leisure. Our strategic plan, announced in July 2010, was to reduce our tenanted and leased estate to 1,200 sites. We believe that a smaller estate than originally envisaged is now more appropriate going forward as we move increasingly to higher growth areas in our markets and to improve the customer offer.

"The retained Pub Partners estate represents a high quality, cash generative business, although it is likely to become smaller still as we transfer some sites back to retail and seek to dispose of additional sites in the estate to improve both yield and returns. We now expect to reduce the estate to around 750 sites."