Business
M&B acquires the majority of Orchid Group Estate
M&B acquires the majority of Orchid Group Estate.
About this update from Mitchells & Butlers Plc
[{"type":"text","content":"\n \nRNS Number : 6724J Mitchells & Butlers PLC 16 June 2014 \n \n\nMITCHELLS & BUTLERS PLC\n16th June 2014\n \n \nMITCHELLS & BUTLERS PLC ACQUIRES THE MAJORITY OF THE ORCHID GROUP ESTATE FOR £266 MILLION\n \nMitchells & Butlers plc (\"Mitchells & Butlers\"), the UK's largest operator of managed pubs and restaurants, announces today that it has acquired the majority of the activities of the Orchid Group (\"Orchid\"), including 173 predominantly freehold pubs and the Orchid head office. The purchase price, paid entirely in cash, is £266 million.\n \nHighlights\n \n· High quality, well-located estate of 173 pubs, of which 158 are freehold or long leasehold.\n \n· Expands Mitchells & Butlers' share of the growing UK branded pubs and restaurants market in line with its stated strategy.\n \n· Opportunity for substantial sales and profit uplifts from conversion of 96 pubs to Mitchells & Butlers brands and formats over a two year period.\n \n· Cost savings and synergies of at least £6 million per annum available from rationalisation of support functions and combination of purchasing.\n \n· Immediately enhancing to adjusted earnings1 with further improvements to earnings and returns as cost savings and synergies are realised and as conversions are undertaken. Overall, expected double digit earnings enhancement1 with returns well ahead of cost of capital.\n \nCommenting on the transaction Alistair Darby, Chief Executive of Mitchells & Butlers, said:\n \n\"The acquisition of the majority of the Orchid estate will accelerate Mitchells & Butlers' growth and present significant opportunities for value creation through cost savings, synergies and the conversion of Orchid pubs to Mitchells & Butlers brands. We greatly look forward to welcoming the Orchid employees who will transfer to Mitchells & Butlers as a consequence of this acquisition.\"\n \nDetails of the transaction\n \nMitchells & Butlers has acquired the majority of the Orchid estate following a sale process conducted by the owners of Orchid. The acquired assets comprise 173 pubs, the Orchid head office function and ass...