April 29, 2019 | Deals

GCA Altium advises Loungers on its £185 million IPO

GCA Altium acted as financial advisor and NOMAD on the AIM IPO of Loungers plc, the growing, all-day café-bar operator. The transaction valued the company at an enterprise value of £212.5 million and raised £83.3 million for the company and existing shareholders. The IPO positions Loungers strongly for the next stage of its development, providing it with an appropriate capital structure and enhanced profile as it looks to continue to roll out c.25 sites a year.

Loungers was founded in Bristol in 2002, and operates 146 café-bar-restaurants under two distinct but complementary brands, Lounge and Cosy Club. The company’s focus on hospitality, value for money and the local community, combined with an entrepreneurial and highly experienced management team has enabled it to consistently deliver like-for-like sales ahead of the wider market.

The founders, management team and the company’s private equity backers Lion Capital are retaining a combined 55% stake in the business post IPO and remain committed to driving continued growth and value as a listed company. The successful IPO was delivered despite an uncertain political and macro-economic environment and concerns about the UK consumer sector.

Alex Reilley, Founder and Executive Chairman of Loungers plc, said: “We are thrilled to have succeeded in our ambition of listing Loungers, which we felt was the right decision for the future of the group. We could not have done it without the help and expertise of GCA Altium. They worked tirelessly to ensure that the correct outcome was reached for all shareholders, and I look forward to our ongoing professional relationship.”

Nick Collins, Chief Executive Officer of Loungers plc, said: “We are delighted that our unique business has resonated strongly with investors. We firmly believe in the ongoing story of this brilliant company, and we look forward to life as a listed business. This would not have been possible without the sound advice and guidance from GCA Altium. They combined sector knowledge with execution expertise and were also a pleasure to work with.”

Sam Fuller, Managing Director at GCA Altium, said: “Loungers is one of the most exciting businesses in hospitality, driven by a dedicated and extremely experienced management team. It was credit to the business to get such a positive result in the current macro environment and we look forward to continuing our long-standing relationship with them as a listed company.”

This transaction represents the second time GCA Altium has advised Loungers, having advised on the investment by Lion Capital in 2016. The transaction combines GCA Altium’s market-leading experience and reputation as an adviser to the UK hospitality sector with its public market and debt financing expertise.

The deal is GCA Altium’s eighth UK consumer deal in the last 12 months.

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