International law firm CMS has advised NewRiver REIT plc (NewRiver), a London Stock Exchange-listed real estate investment trust, on its sale of the entire issued share capital of Hawthorn Leisure REIT Limited (Hawthorn), the entity that holds NewRiver’s entire community pub business, to AT Brady Bidco Limited (Admiral Taverns), a wet-led community pub operator with approximately 1,000 pubs across England, Wales and Scotland.
NewRiver has sold Hawthorn for a gross aggregate cash consideration of approximately £222.3 million. In addition, a further amount of up to £4 million, in relation to a pending insurance claim, may be received by Hawthorn.
The net aggregate proceeds of the disposal will be used by NewRiver to reduce net debt, significantly strengthening its balance sheet and accelerating the delivery of its target to reduce Loan-to-Value ratio below 40 percent. This includes repaying the £100 million outstanding balance on its revolving credit facility.
The sale closed on 20 August 2021. It was a Class 1 transaction, subject to shareholder approval. In conjunction with the completion of the disposal, Will Hobman has joined NewRiver’s Board and has become its Chief Financial Officer.
The CMS team advised NewRiver on the sale, provided vendor due diligence and advised on the Class 1 circular to shareholders.
Kristy Duane, CMS Corporate partner, comments: “We are delighted to have supported NewRiver on this important transaction. The pub industry has withstood a challenging 18-months, but investors’ appetite for operational real estate has not diminished. CMS’s involvement is testament to the firm’s deep M&A and ECM expertise and is a great example of our Real Estate and Leisure sector strength. With deal activity set to remain buoyant, the CMS ECM and M&A teams anticipate a promising pipeline of future transactions coming to market this autumn.”
Allan Lockhart, Chief Executive of NewRiver, comments: “We have grown Hawthorn to become the UK's leading community and wet‐led pub business and, as a consequence, we received significant interest from a range of potential buyers. I’d like to thank the CMS team for their support throughout this process. We are delighted with this outcome which has delivered a great result for NewRiver shareholders.”
The CMS team was led by Kristy Duane and included Jack Shepherd, Ben Hendry, Kate Badr, Kieran O’Brien, James Clarke, Jennifer Tambe, Georga Ballard, Shirin Shah, Nikita Patel and Max Monafred (Corporate); Abby Dry and Daniel Watkins (Real Estate); Philip Anderson and Preena Gandhi (Tax); Andrew Quayle and Stacey Callaghan (Share Schemes); Russell Hoare and Louisa Mottaz (Competition); Tracey Marsden and Emma Sweetman (Employment); and Simon Kilgour and Neil Beighton (Insurance).
CMS has one of the largest Corporate teams in the world and is consistently ranked in the top three for both UK and European M&A by Bloomberg and Mergermarket. The firm also has considerable Real Estate sector expertise, backed up by Tier 1 rankings in Chambers and The Legal 500.
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