We invested in Pubmaster, one of the UK’s largest independent pub operators, amid a substantial consolidation of the sector.

We bought the company from Brent Walker Group in November 1996 in a deal that valued the business at £168m. At acquisition, Pubmaster operated about 1,600 pubs, of which 1,500 were tenanted and 100 directly managed.

Our investment

Our team saw the opportunity for significant growth through acquisition, as the pub sector continued to consolidate. The strategic plan was to sell the managed pub division to take advantage of the high multiples in the sector and reinvest the proceeds in tenanted pubs, which were available at much lower prices.

Furthermore, we backed the management’s plan to improve the quality of the estate and enhance profitability through a targeted programme of capital expenditure.

Value creation

We realised Pubmaster’s non-core operations before implementing our buy and build strategy. In May 1997, we sold the managed division for £36.7m and the gaming subsidiary to Bass - former owner of bingo clubs operator Gala - for £5m. This meant we had successfully turned Pubmaster’s sole focus to its tenanted operations.

In June 1999, we acquired 54 pubs from Devonshire Pub Company for £17m and 152 pubs from Mercury Taverns for £35m. After a successful securitisation in July 1999, which raised £305m, we refinanced existing debt and acquired the freeholds on the leased pubs for £105.2m. In the same month we raised £100m in bridge financing to continue the buy and build strategy, acquiring 662 pubs from Swallow for £126.9m.

On each acquisition, the business renegotiated with beer suppliers to achieve better buying terms as a result of increased scale. During the course of the investment, significant sums were also invested to enhance the quality of the estate and several hundred underperforming pubs were sold.


In December 2000, we sold the business to a trade consortium for £499m, generating a 2x return and an IRR of 21%.




United Kingdom

Investment date


Exit date


Deal size (exit)



Mid-market fund




Key facts

3 Acquisitions

adding more than 800 pubs

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