Loungers snapped up by US private equity firm Fortress in £338m deal

Cosy Club owner Loungers has agreed to an acquisition by US investment firm Fortress in a deal valuing the business at £338m.

 

Under the terms of the acquisition, Fortress is offering 310p per share, a cash offer price which is above the highest-ever closing price for Loungers shares and a 30% premium to yesterday’s closing price of 238p per share.

 

The deal came as Loungers, which operates 280 locations under the Lounge, Cosy Club and Brightside brands, revealed a solid performance for the 26 weeks ended 6 October 2024. Revenue over the half year period increased 19% to £178.3m, while pre-tax profit was up over 50% to £5.9m.

 

Alex Reilley, 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."

 

Domnall Tait, managing director of Fortress – which also owns Punch Pubs & Co., Majestic Wines and Vagabond in the UK – added: “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.

 

“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."