Marston's buys rival Eldridge Pope
Pub company Marston's has bought South England based rival Eldridge Pope, owner of the Que Pasa high street chain, for just over £155m.
Marston's, previously Wolverhampton & Dudley Breweries, said the 153 pubs would make "an excellent fit" for its expanding business and the acquisition would boost earnings within the first year.
Marston's plans to dispose of 18 Eldridge Pope sites for up to £10m over the next 12 months. The 135 remaining pubs in the Eldridge Pope estate will consist of 95 managed sites and 40 tenanted pubs.
Ralph Findlay, chief executive of Marston's, said: "We are delighted with the acquisition of Eldridge Pope. It has invested significantly in the business in recent years, and offers a high quality well managed estate which complements our existing business both operationally and geographically."
Food at the acquired managed pubs, the majority of which consist of community style boozers, represents 30% of total turnover.
Marston's has paid the majority of the deal in cash, with £17.1m of debentures and loan notes also issued. As part of the deal, it has also replaced its existing £275m corporate banking facility with £400m of new facilities.
The deal is expected to save £800,000 in annual purchasing costs, with Eldridge Pope's central overhead costs reduced from £5m to £2.9m.
In the second year of ownership, Marston's expects to save another £1m in purchasing costs.
Current trading At Marston's Inns & Taverns, its managed division, like-for-like sales were 7% ahead of last year in the 16 weeks to 20 January. The company added that its tenanted and leased division, Martson's Pub Company, had seen good trading ahead of last year.
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By Chris Druce
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