Redcape buys three pubs and eyes IPO

Redcape buys three pubs and eyes IPO

Redcape has made three new pub purchases in the past month, taking its portfolio to 30. 

Moelis Australia has launched a private raising for its pubs fund, Moelis Australia Redcape Hotel Group, to finance the deals, ahead of a potential initial public offering. 

Redcape was acquired by a Moelis Australia managed fund for $677 million in 2017.

The latest purchases are the Australian Hotel and Brewery (pictured above) and Granville's Vauxhall Inn in Sydney, plus The Sun Hotel in Townsville. The combined cost for the two Sydney properties is estimated to be around $90 million, while Redcape picked up the Rising Sun for $22 million. 

Australian Brewery has approvals in place to double its production capacity and establish on-site packaging and canning facilities. Redcape will distribute the beers through its pub network nationally.

Dan Brady, Redcape’s CEO, said: "We look forward to being part of The Brewery’s ongoing success story and providing support to the team there so that they can continue to grow their creatively authentic craft beer brands.”
The brewpub deal was brokered by John Musca of JLL Hotels & Hospitality; while Ray White Asia Pacific director Andrew Jolliffe brokered both the Rising Sun Hotel and Vauxhall Inn Hotel deals.

"Hotels like the Vauxhall Inn occupy footholds at major transport intersections, and are similarly positioned in respect of relativity to the epicentre of housing development growth corridors throughout Sydney and its well-publicised 100,000 new resident annual expansion rate” Jolliffe said.

Street Talk reports that Moelis has contacted potential investors seeking backers for the three new pub purchases, telling them it would re-open the pub fund to raise $40 million on July 16 and close it again on August 14. 

Street Talk also reports that clients were informed the pub fund was on track for an ASX-listing later this year subject to market conditions.

"Potential investors were told that in the three months to June 2018, external valuations were undertaken on 13 of the 27 pubs in Redcape's portfolio resulting in a $40.5 million uplift," Street Talk reports.

"The remaining properties will be revalued over coming months and are expected, to provide an additional uplift to the portfolio valuation ahead of a targeted IPO in late 2018," Moelis said in a flyer to potential investors. 

"Since acquisition in July 2017, the portfolio has been revalued upwards by $73 million or 11% on a gross valuation basis."

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