Owner of Punch Pubs and Majestic Wines to buy Bristol-based Loungers

Leading global investment manager Fortress Investment Group LLC (which has $48 billion of assets under management), is to buy Loungers, the Bristol-headquartered operator of all day café/bar/restaurants across the UK under the Lounge, Cosy Club and Brightside brands.

Unaudited results for the 24 weeks ended 6 October 2024, released today, reveal that Loungers saw revenues grow almost 20 per cent to more than £178 million.

The deal values the company at around £338 million.

Domnall Tait, Managing Director at Fortress said: "Fortress is pleased to present this offer for Loungers, a company we believe holds a strong and differentiated position in its industry. Loungers' directors have delivered impressive increases in the number of locations, same-store sales and revenues over the past several years - in spite of the recent challenges faced by the wider hospitality sector.

"This growth, and management's continued commitment to the business, give us confidence in the company's growth potential and in the opportunity to increase value."

He added: "Fortress brings to the table a successful track record of investing in consumer-focused businesses across the globe, particularly in the UK. For example, Fortress' investment in Majestic Wines and Punch Pubs & Co has helped drive the growth of each of those companies. Today's announcement further strengthens Fortress' commitment to the UK market, and to being a responsible steward of and investor in UK businesses.

"Fortress has a high conviction in the future of experience-led retail and hospitality, and believes this is highly complementary to Loungers' business model, strong operational performance, and impressive management team. Fortress looks forward to partnering with Loungers' management and to providing them with support to drive the business through its next stage of growth."

Alex Reilley, the Chairman of Loungers, said: "We remain very confident about Loungers' future prospects and the half year results that we announced separately today clearly demonstrate the strong momentum that we have in the business.

"Loungers has come a long way since we opened our first site in Bristol in 2002, and we are hugely proud of the jobs we've created, the positive impact we've made on the UK's high streets, and the outstanding hospitality our amazing teams have provided since then.

"We are more ambitious than ever and we see Fortress as being an ideal partner to help us take Loungers into the next phase of its growth journey. We believe that the acquisition represents a compelling proposition for all of our stakeholders and will allow us to execute our ambitious growth plans even more decisively and effectively."

On the company's revenue growth, Nick Collins, Chief Executive Officer of Loungers said: "The first half of the year has been another period of excellent progress for Loungers, with revenue up 19 per cent and adjusted EBITDA up 25 per cent.

"We opened 17 new sites and are on track to finish FY25 with 292 sites across all three brands. As ever, the performance is testament to the quality and flexibility of our all-day offering, the hard work and professionalism of our teams, and the ongoing resilience of the UK consumer."

The news of Loungers comes in the same month at Fortress bought Curzon, a leading arthouse film company. The company operates Curzon Cinemas – with 16 cinemas and 46 total screens across the UK – as well as film distributor Curzon Film, and the Curzon Home Cinema streaming service.

As of May 2024, Loungers operated 262 sites in England and Wales across three distinct but complementary brands, Lounge, Cosy Club and Brightside. Founded in 2002 by three friends who wanted to create a neighbourhood café-bar that they would want to go to, the Group is now the only growing all-day operator of scale in the UK and has consistently outperformed the wider UK hospitality sector over the past three years.