A huge chain of cafés, bars and restaurants that started life in Bristol is set to be sold to an American investment company in a deal expected to be worth £338 million. Loungers, which operates the Lounge, Cosy Club and Brightside brands, opened its first Lounge bar at a former opticians in North Street, Bedminster, in 2002.
The three founders started the multi-million-pound operation with £10,000. It now operates 280 venues around the UK. US investment firm Fortress Investment Group said it has made an offer for the UK hospitality group.
Fortress said it thinks Loungers has a “strong and differentiated position”, having grown its locations and sales in recent years “in spite of the recent challenges faced by the wider hospitality sector”.
The group’s managing director, Domnall Tait, said: “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.”
Fortress has previously invested in British firms including Majestic Wines and Peach Pubs & Co. Loungers primarily operates its cafés and bars in suburban high streets and small town centres with its Cosy Club restaurants in city centres.
The US firm has offered 310p for each Loungers share, which represents a premium of about 30% to its closing price on Wednesday. The deal values the entire share capital of Loungers at about £338.3 million, the firms said.
Loungers chairman and co-founder Alex Reilley said the group has “come a long way” since first opening, adding: “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.”
Loungers needs the approval of its shareholders for the acquisition to go ahead. Fortress intends to make the purchase through a newly formed investment vehicle. It marks the latest London-listed firm to strike a deal with an international private equity group.