LGV Capital acquires Amber Taverns

Private equity firm LGV Capital has completed the secondary management buy-out of pub company Amber Taverns based in Preston, Lancashire.

Amber Taverns operates 56 pubs, predominantly in the North West and North East under its operator agreements, which offers its pub operators a share of the pub's takings.

LGV has backed the existing management team of Clive Preston, as chairman, James Baer, joint managing director, Bryan Wardman, joint managing director, Michael Norris, finance director, and Gary Roberts, operations director.

LGV is part of the Legal & General Group and has a 20 year history of backing management teams in consumer, leisure, services and healthcare sectors.

Bill Priestley, a managing director at LGV, said: "This will be LGV's fourth investment in the pub sector. We backed the original start up of Enterprise Inns before it floated in 1994, co-funded the acquisition of The Unique Pubco, which was sold to Enterprise Inns in 2004 and, most recently in 2008, we backed the management buy-out of The Liberation Group, the Channel Islands' leading pub company and brewer. In each of these, we were attracted by the quality of the pubs and the strength of the management teams we were backing and Amber is no exception.

"The death of community pubs has been significantly over exaggerated in recent years and Amber is a perfect example of a business which has quietly gone about disproving the rule that pubs can only succeed where there is a food offering. From a start up in 2005, Amber has selectively expanded its estate and can now offer some of the best local pubs in the North. We, together with Amber's long term funders, Lloyds, look forward to supporting the management team to expand the estate further over the next few years."

Clive Preston, Amber Taverns' chairman, added: "For our original VCT backers Unicorn Asset Management, Acuity Capital Management and MaxCap Partners who have supported us for the last five years it provides a successful cash exit of 2.7 times their original investment and gives LGV, who already have a sound knowledge of our industry, a well established platform in the UK mainland licensed sector.

"Our policy of purchasing carefully selected distressed or closed pubs in busy locations in the North of England and then making a significant investment in refurbishing them has been hugely successful. We add further value with the full sky sporting package on big screen TVs, and sell premier brands at realistic prices.

"We have developed a unique operating model which empowers pub managers to be entrepreneurs, highly incentivises them by giving the a percentage of their sales and encourages them to be a genuine "mine host".

"Our Operator Agreement is already being used by other substantial pub companies and we believe it will gain increasing popularity in the industry in future years. Large managed houses will continue to work well on payroll but we believe our hybrid approach is the way forward for much of the pub stock in this country.

Preston added that the Amber Taverns team has the ability to double the size of the business in the next three to four years with the help and support of LGV.

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