US investment group Cerberus buys Admiral Taverns

TENANTED pub group Admiral Taverns, which has 1,100 sites nationwide and its head office in Chester, has changed hands in a deal said to be worth £200m.

Lloyds Banking Group, which took control of Admiral as part of a restructuring in 2009 involving a debt-for-equity swap after the firm was swamped with £900m debt, has sold its interest to New York-based private equity house Cerberus.

Cerberus will retain Admiral’s existing management team led by executive chairman Jonathan Paveley and managing director Kevin Georgel, and invest in the business, which like many pub operators, has been hit by the recession, the smoking ban and competition from supermarkets.

Admiral reported £27m underlying core earnings in the year to June 2011. It employs around 40 people at its Chester base.

Jonathan Paveley said: “This is a great transaction  for Admiral Taverns and a tremendous start to 2013.  We are delighted that Cerberus has chosen to invest in Admiral and that it recognises Admiral’s future potential.

“Cerberus’s support will help Admiral develop the business further and strengthen its reputation among pub licensees as the best tenanted pub group in the country.”

Senior managing director at Cerberus, Lee Millstein, said: “Admiral has one of the strongest management teams in the UK leisure industry and we are pleased to be working with them.

“Their successful transformation of the Admiral business into a leading UK pub group has put the business on an upward trajectory. Admiral’s business provides an ideal platform for the acquisition of additional tenanted pubs in the UK, and we look forward to working with the company’s management team and employees to grow the company.”

Lloyds Banking Group and the Admiral Taverns management were advised by PWC.  Cerberus was advised by Sapient Corporate Finance.