Another large acquisition for Veritas

Veritas Investments (NZX:VIL) is acquiring The Better Bar Group in a deal expected to boost Veritas’ annual revenue to more than $90 million.

Mad Butcher owner Veritas has signed a conditional agreement to buy the bar and restaurant operator for $31.2 million.

The Better Bar Group owns and operates 11 sites in Hamilton and Auckland, including Ponsonby gastro-bar The Cav and Irish pubs Doolan Brothers and Danny Doolans.

The group employs about 200 people and is expected to generate revenue of more than $31 million a year.
 
The acquisition is conditional on Veritas shareholder approval at its annual meeting to be held later this month, and relevant landlord and key supplier consents and licences.

Of the $31.2 million purchase price, $23.4 million, or 75%, will be paid in cash funded by a $25 million ANZ Bank facility, and the remaining 25% through issuing new Veritas shares.

Veritas chairman Mark Darrow said through a statement that Better Bar has a strong track record of growth and the acquisition is expected to deliver a significant uplift in revenue and earnings for Veritas.

 “This significant acquisition fits our investment mandate and complements the existing companies within the Veritas group.”

The company will be complemented by listed company governance and better resources, which means the businesses can be scaled significantly over time, Mr Darrow said. 

Subject to shareholders approving the transaction, Better Bar chief executive Geoff Tuttle will remain in his role and chairman Richard Sigley will join the Veritas board.
 
The acquisition is expected to be complete late this month.

This will be the fourth acquisition for Veritas in just 18 months, after Nosh Food Market was bought in September with a $5 million ANZ Bank facility.

The NZX-listed investment company, which focuses on the food and beverages sector, also bought half of Kiwi Pacific Foods last December for $2.8 million in cash and $400,000 in shares at $1.38 apiece, with potential earn-outs if certain export targets are met. The remainder of the business is owned by Antares Restaurant Group, which holds the New Zealand Burger King franchise.

Veritas bought the Mad Butcher business in May 2013 in a reverse listing, having sold its assets and returned capital to shareholders.