Excellion Capital arranges £110m credit facility for pub operator

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Excellion Capital

Excellion Capital, a boutique investment and advisory firm focused on real estate and asset-backed investments, has arranged a six-year £110 million whole loan for Red Oak Taverns (Red Oak), an independent pub company operating 208 primarily leased and tenanted pubs across the UK.

The debt facility refinances Red Oak’s existing debt and provides fresh capital to drive their future growth plans. £50 million of the facility serves as an acquisition facility to drive the purchase of new assets and new investment, including capital expenditure into the existing estate.

Founded in 2011 by Executive Chairman Aaron Brown and CEO Mark Grunnell, Red Oak has grown considerably over the past decade, successfully expanding its estate from its initial portfolio of 32 pubs.

The new credit line enables management to continue to expand and to drive performance across its portfolio at a time when pubs have faced a challenging climate.

During 2021, more than 400 pubs closed in England and Wales, with a further 200 closing in the first half of 2022.

Red Oak successfully bucked the industry trend over the past decade and during the pandemic, with the company completing five acquisitions totalling 34 pubs during lockdown in 2021 alone.

It is predicted that, this year, the hospitality industry will regain 93% of 2019 sales to reach £91 billion.

Ashley Marks, Managing Director of Excellion Capital said:

“It was a pleasure working with Red Oak, who really impressed us both with the quality of their management team and their operations, especially given the challenges posed by the pandemic.

Red Oak has proved to be an extremely strong operator in a challenging industry, and we’re glad to assist them in a transaction which will help turbocharge their next stage of growth.”

Mark Grunnell, Co-founder and Chief Executive of Red Oak said:

“We are pleased to have secured this facility and it has been a pleasure to work with Excellion. Our new financing provides us with the capital to continue to expand our portfolio and helps us along the next stage of our journey.”