Thu, 15 Jun 2023 | BUSINESS SALE
A Newcastle-based bar and pub operator has acquired two new sites, backed by a £4.5 million funding package from HSBC UK. Vaulkhard Group, which owns an array of bars and pubs in Newcastle, including Redhouse, Barluga and the Beehive, has acquired two city centre pubs: The Town Wall and the Bridge Tavern.
The two new acquisitions take the group’s total portfolio of bars and pubs in Newcastle and the North East up to 15 and the group says that it will continue to target strategic acquisitions as it seeks to expand further across the region.
Vaulkhard Group Finance Director Craig Bell said that the hospitality sector had seen a “slowing of investment” during and in the aftermath of the COVID-19 pandemic, opening up an opportunity for the group to target M&A-driven growth.
Bell commented: “We saw this dip in the market as an opportunity to invest in premium sites and we will continue to search for similar opportunities in and around the North East as we look to further grow the business. It’s important for us to ensure that our great city retains its reputation as a successful leisure hub.”
Bell added that the challenges posed by COVID-19 meant that the group had initially struggled to find a bank that was “aligned” with its acquisitive growth strategy, but said that HSBC UK had provided “clear and direct support that has enabled us to grow”.
Hospitality businesses across the UK have faced a massive array of challenges over recent years, having been among the hardest hit by COVID-19 – initially by enforced closure during lockdowns and subsequently by social distancing rules that severely limited their capacity.
Despite seeing some recovery during 2021, the sector has more recently been hit by the impact of rising costs for food, labour and energy, as well as being one of the sectors worst affected by the toll the cost-of-living crisis has taken on consumer spending.
However, amid these struggles, the lack of investment in the market has opened up opportunities for well-capitalised firms to acquire struggling businesses and grow at scale, providing they can access the financing to complete deals, as Vaulkhard Group has.
Read more about hospitality sector headwinds and M&A trends.
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