North East hospitality firm The Inn Collection Group has been sold to a new company in a deal said to be worth more than £300m.
The rapidly-growing Alnwick company, which now has 31 sites in its portfolio, has been sold by Alchemy Partners to a new firm owned by the Harris family in conjunction with Kings Park Capital.
The deal takes the pubs-with-rooms company back under Kings Park Capital ownership for a second time, as the London private equity manager was the main backer of the Northumberland group for five years until 2018, when it was sold to Alchemy.
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The Inn Collection Group, first launched in 2006, has been executing a rapid “buy and develop” growth strategy over the last few years, seeking to expand outside its heartland North East to increase its portfolio.
In 2019 the group outlined plans to grow from around 10 pubs to 21 sites, after receiving a £10m funding package from investors OakNorth.
It has more than achieved that goal since setting that target and now has 31 sites across Northumberland, County Durham, the Lake District, Lancashire, Yorkshire, Tyne and Wear and North Wales, taking its room tally from 271 to more than 1,000.
OakNorth, the UK bank for entrepreneurs, also last month injected a further £42m into the business to fund the refurbishment of 13 of it inns, and further fuel its plans to capitalise on the growing staycation market.
The Harris family have strong connections with the leisure and tourism sector, having been one of the three families that founded Bourne Leisure, the Butlins, Haven and Warner holiday group.
The deal with see the 31-site pubco continue trading as normal with its existing team.
The value of the deal has not been disclosed but is said to value the business at more than £300m.
Managing director of The Inn Collection Group Sean Donkin said: “This is a hugely exciting new chapter for our entire team.
“Our success really stems from loving what we do - which is operating outstanding sites where our customers can eat, drink, sleep and explore from in exceptional locations - with a cracking team of people at all levels.
“I am absolutely delighted that The Harris Family Trusts believe in our product and performance and are investing in our future at such a dynamic time.
“We look forward to a long relationship with the Harris family and resuming our established association with Kings Park Capital, who were part of The Inn Collection Group’s formation in 2013.
“It’s very much a case of ‘business as usual’ across our operations as we continue to invest in our people and estate to further develop The Inn Collection Group brand and concept while growing our portfolio with new sites.
“Our greatest thanks to the team at Alchemy for backing us over the past four years and enabling us to far exceed our projected growth plans.”
Paul Harris said: “We are excited at the prospect of backing Sean and his team to continue their ambitious strategy and to support further growth of their high quality portfolio of well-located inns with great potential.
Commenting on the transaction, Alchemy Partner Thomas Boszko said: “Our investment into The Inn Collection Group is a text book example of the kind of deal we target: backing an outstanding management team to aggregate and dramatically enhance multiple underinvested owner-operated sites.
"Sean and the team have built the gold standard in modern inn groups and I have no doubt the new owners will be as delighted with the performance and the team as we have been.”
News of the takeover comes as The Inn Collection Group completed a further three deals over the weekend, to take its portfolio past the 30 site milestone.
After snapping up the 90-room Hotel St George in Harrogate on Friday, hours later it announced it had also purchased Ambleside sites the 36-room The Regent Hotel on the shores of Lake Windermere and the 19-room Ambleside Lake House on Waterhead Bay.
Following the completion of the Lakes deals, Mr Donkin said: “It is a landmark achievement for the group to have passed the 30-site marker and I’m delighted that it has been with venues of the calibre as The Regent Hotel and Ambleside Lake House.
“It is a sign of The Inn Collection Group’s ongoing commitment and investment in the Lake District as we drive forward strategic expansion plans with our Eat, Drink, Sleep and Explore concept while making significant contributions into the communities around our sites with employment, inter trading and wider economic benefits.”
Ward Hadaway corporate partner Imogen Holland provided legal advice on the acquisitions with Neil Hart at Bradley Hall advising on pre diligence.
Neil Hart, group managing director at Bradley Hall Chartered Surveyors and Estate Agents said: “We are proud to be continuing our work with The Inn Collection Group through the acquisition of the Regent and Lake House as the firm expands its Lake District portfolio.
“The organisation is a fantastic Northern business and its commitment to providing exceptional venues is unrivalled. The firm is also creating new jobs in the hospitality sector throughout the Lake District at an important time for recovery within the sector.”
Julian Troup, head of UK Hotels Agency at Colliers, acting on behalf of the vendor, said: “The Regent Hotel and Ambleside Lake House are very strong businesses that have been built up by the Hewitt family over the last four decades. They are both located in prime positions and with a good reputation which sees them receive frequently repeat visits from customers wanting to return to stunning properties and the Lake District.
“Already the hotel market is looking to follow similar suit to 2021 with brands like The Inn Collection Group expanding their portfolio by purchasing quality assets likes these and capitalising on the staycation boom which will continue this year and into 2023. Last year Colliers sold 76 hotels, four to The Inn Collection Group alone.”
Keith Melling, Wendy Keely and Nicola Ciraolo of Napthens Solicitors and Rob Richardson and Jenny Pape of Azets advised the Regent Hotel shareholders.
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