OakNorth – the bank for entrepreneurs, by entrepreneurs – has completed a £42m loan to Red Oak Taverns, the national pub operator, enabling the business to continue expanding across the UK and refinance existing debt.
Formed in 2011 by Aaron Brown and Mark Grunnell, Red Oak Taverns is an entrepreneurial national pub company which comprises 161 mainly leased and tenanted pubs, but also includes several managed and franchised venues. The Company is privately-owned by its co-founders and a small number of like-minded individual investors. The pub estate is mainly concentrated in the South, South West, North West and the Midlands. Red Oak Taverns prides itself on its flexible partnerships with its Tenant Partners with the aim of developing long-lasting relationships.
Mark Grunnell, co-founder and director of Red Oak Taverns, commented: “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. They have also bought into our future growth plans, providing us with the financial firepower to take advantage of small and medium sized acquisition opportunities. We particularly enjoyed meeting Credit Committee and being given the opportunity to discuss our borrowing requirements directly with the decision makers.”
Commenting on the transaction, Mohith Sondhi, Debt Finance Director at OakNorth said: “Since our launch in September 2015, we have been focused on one thing – helping UK businesses achieve their growth ambitions, backing excellent management teams in the process. Both Mark and Aaron have proven with Red Oak Taverns 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. We are delighted to have supported them in this transaction and look forward to working with them on their continued growth in the future.”