A
s far as remarkable
acquisition stories go,
you’ll be hard-pressed
to surpass Stonegate’s
planned takeover of Ei Group when
you consider that the business only
came into existence nine years ago
after it purchased 333 pubs from
Mitchells & Butlers.
Not only that, but with 4,000 pubs
to its name, Ei Group’s portfolio is
five times as large as its prospective
owner’s. Stonegate currently operates
765 sites, having grown in size and
scale through a series of strategic
acquisitions during recent years.
The combined business will
operate close to 5,000 pubs and
positions Stonegate as the
UK’s largest pub group.
The deal values Ei Group —
formerly known as Enterprise
Inns — at 38% more than its
closing share price prior to the
announcement and represents a
multiple of approximately 11.4 times
its underlying EBITDA of £261m for
its last financial year.
Stonegate sees the takeover as a way
to build scale and diversification so
that it can compete more effectively
in what it expects to be a challenging
operating environment in the
foreseeable future.Acquisitive pub group Stonegate has busted its most dramatic move
yet after agreeing to buy Ei Group in a £1.3 billion deal that has huge
implications for the UK pub supply chain.STONEGATE AND EI GROUP
CREATE NEW PUB SUPERPOWER
Stonegate was originally formed out of 333 M&B pubs nine years ago and
will soon become the UK’s largest pub company after buying Ei Group.“It is an exciting prospect
to bring EIG and Stonegate
together to create a diversified
pubs group with significant
industry expertise. We have
an established track record
of running successful pubs
throughout the UK — with over
£350m having been spent
on capital expenditure at
Stonegate since it began trading
in November 2010. We plan to
leverage our existing managed
house infrastructure, portfolio of
formats and access to capital and
invest in the combined estate for
the benefit of all stakeholders.”
IAN PAYNE, CHAIRMAN, STONEGATE“The acquisition delivers the
future value of the strategy for
our shareholders and secures an
exciting future for our tenants
and employees by creating the
leading managed and tenanted
pub company in the industry.
The commercial benefits of
combining the companies
are compelling. Stonegate is
committed to continuing to
invest in the business for the
future benefit of the combined
business, tenants and employees.
The EIG board believes this is a
combination it can recommend
with confidence to shareholders
and stakeholders alike.”
ROBERT WALKER, CHAIRMAN, EI GROUP5,
COMBINED SIZE
OF STONEGATE-
EI GROUP ESTATE
UPON MERGERhttp://www.foodserviceequipmentjournal.com August 2019 | Foodservice Equipment Journal | 19
INDUSTRY