GI Partners acquires Spirit Group portfolio

California- and London-based private equity firm GI Partners has acquired 290 managed pubs from Punch Taverns through wholly-owned subsidiary Orchid Pubs.

GI Partners paid £571 million (€831 million; $1.05 billion) for the Spirit Group pubs portfolio, its largest deal in Europe to date.

Punch Taverns sold a portfolio including 136 pubs in the south of England and Wales, 133 in the north of England and 21 in Scotland. The majority of the pubs operate under the Country Carvery, Q’s and Bar Room Bar brands.

Punch Taverns reportedly beat off competition from Clearbrook Capital Partners, the Barclay brothers, Macquarie bank, Robert Tchenguiz and Mitchells & Butlers to acquire pub operator Spirit Group in a £2.7 billion transaction in December 2005. Vendors in that transaction were Texas Pacific Group, Blackstone, CVC Capital Partners and Merrill Lynch Private Equity, which acquired the asset in November 2003 for an undisclosed sum.

Earlier in September 2005, London-based Alchemy Partners acquired 178 high street establishments owned by Spirit Group for £177 million.

GI Partners declined to comment on the transaction.

The transaction is GI Partners’ second in the pubs and restaurants sector in the last month. In May, the firm acquired 21 oriental pub restaurants from Noble House Leisure and Oriental Pub Company.

According to GI Partners, the newly-acquired pub estates will be merged and headed up by Rufus Hall, previously managing director of Ha!Ha! Bar & Canteen, formerly a division of Yates.

Last May, GI Partners disposed of its interest in Bolton-based wine bar chain Yates in a £200 million sale to property entrepreneur Robert Tchenguiz. GI Partners reportedly invested approximately £40 million in Yates in a £93 million deal in August 2004.

Founded in 2001, GI Partners currently has $2 billion of capital under management. Its other investments in the UK include specialist care business NHP Healthcare Partnerships and data switching centre Camperdown House.