Pubs giant eyes more buyouts as private equity steps in

afr.com:

The boss of Australia’s second-largest pubs group, Australian Venue Co, says bookings for Christmas functions are up 40 per cent on this time a year ago as households and businesses seek out better value alternatives to restaurants, keeping the economy on track for a soft landing.

AVC will step up expansion plans under its new private equity owner PAG, underscored by solid trading in the first two months of 2023-24.

Australian Venue Co CEO Paul Waterson says the group will step up its push to being a consolidator in the pubs industry under new majority owner, private equity group PAG.  

PAG – which also owns Patties Foods, the maker of Four’N’Twenty pies – on Friday bought out KKR’s 80 per cent stake in AVC for $1.4 billion. AVC has 212 pubs and bars in its stable and chief executive Paul Waterson said 87 per cent of all the pubs in Australia are still operated by single-owner players.

“It’s still incredibly fragmented and there’s a really big pipeline of opportunities,” he said.

AVC is the biggest rival to Endeavour Group, the ASX-listed company which owns 354 pubs around Australia, along with the Dan Murphy’s and BWS liquor retailing chains.

Mr Waterson has spearheaded 158 acquisitions under KKR’s ownership and said AVC would accelerate its consolidator approach, but he was equally mindful of opportunities where existing properties could be upgraded and expanded.

“You’ve got to be able to show that you can add value,” he said.

There is little sign of any fall-off in spending at the group’s venues, which were capturing customers resisting high-end restaurant dining, but who still wanted to venture out.

“We’re sort of nicely wedged in the middle,” Mr Waterson said.

Revenue was up 7 per cent for the first eight weeks of