Yorkshire and North East Dealmakers Guide 2016 - 12

12 GROWING YOUR BUSINESS Inn Collection Group snaps up Durham Vale Durham Vale Developments was the latest target for Inn Collection Group, as part of its buy-and-build strategy. This was a complex transaction with a number of challenges CASE STUDY T he Inn Collection Group is an important player in the North East tourist sector. The group was shortlisted in the prestigious national Publican Awards in 2015. The group acquired the entire issued share capital of Durham Vale Developments following its acquisition of the business operated by a related company for £2.9m. Durham Vale holds the freehold to the Kingslodge Hotel in Durham, which, once refurbished, was opened under the Inn Collection brand to add to the existing portfolio. Funding for the transaction was provided by Santander alongside the existing majority shareholder, Kings Park Capital, a specialist leisure sector funder based in London. Inn Collection Group has continued with its buy-and-build strategy in the leisure sector, funded with debt and equity funds raised in 2013. The group now owns six units with a further establishment being developed in Blyth. Ward Hadaway acted for the buyer. The firm has acted for the group since 2013, advising on corporate finance, banking, property, planning and licensing. Martin Hulls, who led the team, highlighted the significance of the deal not only to the parties involved but also for the region. "The deal is significant because the acquisitions have safeguarded jobs and created further employment in the North East," he said. "The group has also created a significant presence in the wider region and contributed to developing the reputation of the North East into a tourist destination." The transaction was complex: first, the acquisition was conditional upon vacant possession of the property and the parties were required to work with the tenant to achieve this and simultaneously complete the share purchase while terminating the tenancies. Second, the acquisition was structured as a share purchase but with the price being calculated effectively as if the assets were being acquired, being the more usual mechanic for such transactions. A completion account mechanism was added to the documentation to effectively test the net asset position. Third, the deal was funded by two parties, which meant complex arrangements between funders were updated as a result of the transaction. Inn Collection Group has continued to expand in challenging times. The acquisition increased the number of units held and safeguarded jobs. Once the venue was refurbished, 25 jobs were also created. The equity funding package is also managed from London, and the transaction has ensured funding from outside the region assists in the growth of this regional group. Other advisers and funders on the deal included Clive Owen, Santander, Bond Dickinson and Square One Law.

Table of Contents for the Digital Edition of Yorkshire and North East Dealmakers Guide 2016