Pub and restaurant firm Mitchells and Butlers has acquired the majority of the Orchid Group estate, in a deal worth £266m.
The company, which operates brands including All Bar One, Harvester and O'Neills, has taken on 173 pubs - 158 of which are freehold or long leasehold - as well as Orchid's head office.
Mitchells and Butlers indicated that it would convert 96 of the pubs to its own brands and formats (such as Harvester, Toby Carvery, Ember, Miller & Carter, Castle and Vintage Inns) over a two-year period, saying it hoped the move would deliver "substantial sales and profits uplifts". M&B currently has average weekly sales in its sites of £22,700, compared with an average of £15,300 per week in Orchid sites.
The group also anticipated an annual saving of £6m available from rationalising the support functions and combining the purchasing operations of the two groups.
Alistair Darby, chief executive of Mitchells & Butlers, said: "The acquisition of the majority of the Orchid estate will accelerate Mitchells & Butlers' growth and present significant opportunities for value creation through cost savings, synergies and the conversion of Orchid pubs to Mitchells & Butlers brands. We greatly look forward to welcoming the Orchid employees who will transfer to Mitchells & Butlers as a consequence of this acquisition."
M&B paid cash for the Orchid business, most of it from its existing cash resources, as well as putting into place unsecured facilities totalling £150m from existing lenders.
The Orchid sites that M&B is acquiring are spread across the UK, with a bias towards the South East and the North West of the UK. The deal is expected to take the total M&B estate to almost 1,800 sites.
Orchid was reported to have been put up for sale by Deutsche Bank in summer last year. Up until the deal with M&B, the group ran around 290 pubs and restaurants.