Asian private equity major PAG has agreed to acquire buyout giant KKR’s controlling interest in Australian Venue Co, an operator of pubs, restaurants and event spaces, for an undisclosed amount.
AVC owns and operates a portfolio of more than 210 pubs, bars and venues in metro, suburban and regional locations across Australia and New Zealand, the parties said Thursday in a release. Manhattan-based KKR invested in AVC in 2017, picking up a portfolio of 50 leasehold venues and later adding further assets through a series of acquisitions.
For PAG, led by co-founder and chairman Weijian Shan, the deal expands its interests Down Under after the Hong Kong-based firm acquired a Sydney office tower earlier this month.
“Our goal is to work with strong businesses and help them become even stronger in Australia,” said Lincoln Pan, partner and co-head of private equity at PAG. “AVC has created some of the most unique and iconic venues across Australia and New Zealand, and we are looking forward to supporting them on their next stage of growth.”
Third Time Lucky
After building up the AVC portfolio — including with the 2019 purchase of 87 Coles pubs for A$200 million (now $128.5 million) — KKR sought to list the company on the Australian Securities Exchange in early 2021, but concerns over COVID-related business disruptions led to the cancellation of the A$352 million IPO.
According to the newspaper’s sources, KKR’s total investment in AVC amounted to about A$500 million after an initial bet of A$150 million. The US firm was said to be seeking A$1 billion for the Aussie company.
The transaction with PAG is expected to close in late 2023, with acquisition financing arranged by KKR’s capital markets arm.
Dealing Down Under
PAG’s investment in AVC is the firm’s latest in Australia’s consumer sector after acquiring restaurant operator Craveable Brands in 2019 for an estimated A$500 million and buying and integrating Patties Foods and Vesco Foods last year in a A$550 million deal.
The Hong Kong firm recently finalised its purchase of 44 Market Street in central Sydney for A$393.1 million, taking advantage of a downturn in the Aussie market to pick up the office tower at a discount. The acquisition was done via PAG Real Estate Partners Fund III, which achieved a $1.8 billion final closing this year to mark the biggest fundraising for a core-plus/value-add strategy in 2023.
In 2020, PAG acquired Sydney-based office fit-out specialist Unispace in a deal reportedly worth more than A$300 million.