Brewery and pubs firm Marston’s will take over the running of 156 pubs in Wales from SA Brains, saving up to 1,300 jobs.
The company will take over all 156 of Brains pubs in Wales, which will continue to operate under the Brains brand and will still sell the Welsh brewer’s beer.
Marston’s has exchanged on a deal to take over the operation of Welsh brewer and retailer SA Brain’s 156-strong pub estate. The deal will see the Ralph Findlay-led Marston’s operate 141 freehold pubs on a leasehold basis, with effect from February 2021, with rent chargeable from 1 April 2021. The majority of these will be on long lease agreements of 25 years. The outlet level Ebitda on a pre-covid basis is £14m and annual rent of £5.5m will be charged from April 2021.
In addition, Marston’s will operate the remaining 15 short-leasehold sites on a management contract basis for a period of two years. The circa 1,300 people currently employed in the pub business will transfer across to Marston’s and an initial incremental central overhead of up to £2m will be required to operate the additional pubs. The Brain’s pub business comprises a freehold estate of 86 managed and 55 tenanted pubs, together with a leasehold estate of 15 managed pubs and bars.
Ralph Findlay, Chief Executive of Marston’s, commented:
“We have worked closely with the management team and the SA Brain family to collaborate on a mutually beneficial transaction that safeguards the future of Wales’ leading pub company, enabling these great pubs to have a stable and successful future, and securing 1,300 hospitality jobs in Wales.
“This transaction is entirely consistent with Marston’s long-term strategy as a focused pub operator and strengthens our representation in South and West Wales, whilst protecting the heritage and independence of an iconic Welsh business. These high quality pubs are a great fit with our existing estate and will benefit from Marston’s scale and operational expertise to further unlock their excellent long-term potential. We look forward to the pub teams joining us and to welcoming guests and the communities which they serve, back into these pubs as the country emerges from the pandemic over the weeks and months ahead.”
John Rhys, Chairman of Brains, said
“This agreement marks the formation of a lasting strategic relationship with Marston’s which secures the future of Brains’ pubs and 1,300 of our employees within them. We know and trust Marston’s to be excellent custodians of our pubs and, whilst this is not a decision we have taken lightly, we are confident that both our pubs – and our pubs teams – will thrive under their stewardship. Furthermore, this transaction enables Brains to recapitalise its balance sheet and continue its long heritage as an independent entity, preserving this great Welsh business for generations to come. We thank all our stakeholders and our advisers, Evercore, for their steadfast support which has enabled us to achieve this transaction in these unprecedented times.”