Stonegate and Town & City alliance forms 560-strong estate
A PUB company set up to acquire more than 300 pubs from Mitchells & Butlers has merged with the firm behind Yates’s to form what’s said to be the biggest privately-owned managed pub group in the UK.
Stonegate Pub Company, formed by private equity firm TDR Capital to buy 333 wet-led pubs from M&Bs last November in a £373 million deal, has joined forces with Town & City Pub Company, whose brands include Yates’s and Slug & Lettuce.
Trading as Stonegate Pub Company Ltd, the newly-merged group has 560 pubs across the UK – 18 of which are in Scotland – revenues approaching half a billion pounds and more than 10,000 staff.
TDR Capital, which acquired Pizza Express in 2003 and combined it with the Ask restaurant chain the following year to create the 500-outlet Gondola Group, is the majority owner of the new pubco. Ian Payne will continue as chairman with Toby Smith as CEO, Chris Keen as CFO, Suzanne Baker as commercial director and Graham Jones as COO.
Manjit Dale, TDR Capital’s founding partner, said the merger “significantly extends” the customer offer and allows the group to build on the best of both businesses.
“We are extremely pleased with this combination, which will create the largest privately-held managed pub operator in the UK,” he said.
“Stonegate has developed into a leading pub operator with a high-quality, well-located estate with over 300 pubs in most major towns and cities across the UK. Town & City has a strong customer proposition and will be an excellent complement to Stonegate.
“It has been well-stewarded through a very tough trading period by its banking consortium owners and we believe will further benefit from being owned by a dedicated strong pub and leisure group.
“The UK pub industry continues to undergo significant change. This merger further strengthens our platform and positions us to be leaders in this shake-up.”
Chairman Ian Payne said the merger of the two companies made strategic and commercial sense.
“Both businesses are in year to date sales growth and, by combining their excellent people and properties, the enlarged Stonegate is in a strong position to continue to outperform the market,” he said.
Toby Smith, CEO of the combined business, said: “I am delighted we have been able to bring together two exceptional businesses, which, together, will create a formidable force in the UK pub industry.”
Stonegate’s outlets in Scotland include The Chanter in Edinburgh, The Hall in Glasgow and The Nether Inn in Dundee.