Café-bar chain Loungers has agreed to be acquired by a US investment firm in a deal valuing the business at around £340m.
Fortress Investment Group, which has previously invested in firms including Majestic Wines and Peach Pubs & Co, offered 310p for each Loungers share. It represents a premium of about 30% to its closing price on Wednesday.
Domnall Tait, the managing director of Fortress, said Loungers had 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”.
Loungers, which operates the Lounge, Cosy Club and Brightside brands, opened its first site in Bristol in 2002.
Alex Reilley, co-founder and chair of Loungers, said: “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.”
The announcement came as Loungers posted a rise in profits for the 24 weeks ended October 6. The brand reported revenue growth of 19.2% compared to the first half of the year with sales up +4.7% like for like. Adjusted EBITDA – a measure of performance – was £29.8m, up from £23.9m in the first half.
Loungers, which opened 17 new sites over the period, said it was “on track” to open 35 new sites this year and to end FY25 with 292 sites.
Nick Collins, chief executive of Loungers, said: “The first half of the year has been another period of excellent progress for Loungers… 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.”