Loungers Acquired by US Firm Fortress in £338 Million Deal
Posted by Emma on 28th Nov 2024
Loungers, the operator behind popular UK dining brands Lounge, Cosy Club, and Brightside, has agreed to a £338 million acquisition by US-based investment firm Fortress. The deal values Loungers' shares at 310p each, a 30% premium to their last closing price of 238p, exceeding their highest-ever trading price.
This acquisition marks another example of a London-listed company being purchased by foreign investors as global firms continue to seek opportunities in the UK market.
The acquisition follows a strong financial performance from Loungers for the 26 weeks ending 6 October 2024. The company reported a 19% revenue increase to £178.3 million and a 51% rise in pre-tax profits to £5.9 million. With 280 sites across the UK, Loungers has established itself as a key player in casual dining, offering accessible hospitality options across its three brands.
Chairman Alex Reilley highlighted the significance of this milestone:
"Loungers has come a long way since we opened our first site in Bristol in 2002. We are hugely proud of the jobs we've created, our positive impact on the UK's high streets, and our teams' outstanding hospitality. This deal will allow us to execute our ambitious growth plans more decisively and effectively."
Fortress, which has a history of investing in UK businesses, including Majestic Wines, Punch Pubs & Co., and Vagabond, expressed confidence in Loungers' potential. Domnall Tait, Managing Director of Fortress, praised Loungers' management team and growth trajectory:
"Loungers holds a strong and differentiated position in its industry. Despite challenges in the wider hospitality sector, the company has grown rapidly. This acquisition underscores Fortress's commitment to the UK market and responsible stewardship of UK businesses."
The private equity firm affirmed its support for Loungers' existing strategy and plans to leverage its expertise to help the company continue its expansion.
Loungers' acquisition highlights an ongoing trend of foreign investment in UK hospitality businesses. While it provides opportunities for growth and stability, the trend also raises questions about the undervaluation of UK companies on public markets.
This deal could signal a broader wave of consolidation in the hospitality sector as companies seek new investment to navigate a challenging economic environment. With Fortress's backing, Loungers is well-positioned to strengthen its presence and capitalise on market opportunities.