Pub company boosted by £42m loan deal with OakNorth
Nationwide pub operator, Red Oak Taverns is targeting significant growth after securing a £42m loan from business bank OakNorth.
The company, whose portfolio comprises 161 pubs spread mainly across the South, South West, North West and Midlands, was founded in 2011 and has since completed two major acquisitions.
It’s expected to use the cash injection to refinance existing debt and to help fund future takeovers.
Based in Manchester, OakNorth specialises in working with entrepreneurs and was the ideal lender, according to Red Oak Taverns co-founder and director Mark Grunnel.
He said: “This was a competitive process but OakNorth was able to differentiate itself from other lenders by structuring a flexible and bespoke debt finance package for us, which significantly reduces our cost of capital and enables us to release funds, as required, in line with our acquisition strategy.
“The team have a thorough understanding of the market and, having already worked with us during the previous two years, fully understand how we run our business and drive our profitability and net asset value.”
OakNorth’s debt finance director, Mohith Sondhi, says his client’s growth strategy was key to the deal being completed.
He explained: “Both Mark and Aaron [Red Oak Taverns co-founders] have proven that they can effectively acquire and integrate pub groups and continue to drive the business forward, even through uncertain and challenging economic conditions.
“Their successful ‘buy and build’ strategy has seen them grow to 161 sites in less than a decade and demonstrates the incredible ambition of the business.”
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