• Swindon & Wiltshire M&A, deals
• Thursday November 28 2024
• Author Name: Peter Davison

Cafe chain Loungers to be bought in £340 million deal

Hospitality firm Loungers is to be acquired by Fortress Investment Group in a deal which values it at £340 million.

Loungers – which operates the Lounge cafe brand, Cosy Club restaurants, and Brightside roadside cafes – opened its first site in the Bristol suburb of Bedminster (pictured) in 2002.

Since then it has opened 292 venues, with 17 sites opening in the past year and another 35 in the pipeline.

Fortress – which previously invested in Majestic Wines – has offered 310p for each Loungers share – valuing the company at £338.3 million.

Interim results published today (Thursday) showed revenues up 19.2 per cent on the year at £178.3 million and pre-tax profits up 51 per cent to £6 million.

Loungers chairman Alex Reilley said: “We remain very confident about Loungers’ future prospects and the half year results that we announced separately today clearly demonstrate the strong momentum that we have in the business.

“Loungers has come a long way since we opened our first site in Bristol in 2002, and we are hugely proud of the jobs we’ve created, the positive impact we’ve made on the UK’s high streets, and the outstanding hospitality our amazing teams have provided since then.

“We are more ambitious than ever and we see Fortress as being an ideal partner to help us take Loungers into the next phase of its growth journey. We believe that the Acquisition represents a compelling proposition for all of our stakeholders and will allow us to execute our ambitious growth plans even more decisively and effectively.”

Fortress MD Domnall Tait said: “Fortress is pleased to present this offer for Loungers, a company we believe holds a strong and differentiated position in its industry.

“Loungers’ directors have delivered impressive increases in the number of locations, same-store sales and revenues over the past several years – in spite of the recent challenges faced by the wider hospitality sector.

“This growth, and management’s continued commitment to the business, give us confidence in the company’s growth potential and in the opportunity to increase value.

“Fortress has a high conviction in the future of experience-led retail and hospitality, and believes this is highly complementary to Loungers’ business model, strong operational performance, and impressive management team. Fortress looks forward to partnering with Loungers’ management and to providing them with support to drive the business through its next stage of growth.”