Licensing support for investments firms and on mergers & acquisitions

Hospitality is a multi-billion-pound industry that frequently needs strategic alcohol licensing advice to ensure that major projects run smoothly. The sector attracts private equity investment from global financiers and venture capitalists looking to break into, or strengthen their portfolios within this growing sector.

In addition to private equity investment, hospitality also sees its fair share of merger and acquisition activity.

One such example was the 2020 acquisition of Ei Group by Stonegate Pub Company.

This £1.27bn deal created the UK’s largest pub company with an estate of over 4,000 pubs, bars and clubs, featuring well-known brands such as Slug & Lettuce, Be At One and Walkabout.

The legal work required during mergers, acquisitions and private equity investment is, like many aspects of licensing law, complicated.

Typically it involves managing large due-diligence projects to ensure everything is in order with premises licences, pavement licences, marriage licences, and gaming permissions

For example, we acted for Stellex Capital, one of the most successful mid-market investment firms in the USA, during their multi-million pound acquisition of the Chapman Group; a business consisting of 28 pubs, bars and hotels in the south of England.

This work involved a team of licensing solicitors, paralegals and partner Jonathan Smith, checking that all licences – covering alcohol, weddings and gaming – were fit for purpose now and for the future. This included checking each licence for operating hours and checking for any restrictive conditions, such as the need for security staff.

The legal team then contacted council licensing teams, police and environmental health authorities where each of the premises were located.

Click here to read the full case study on how we worked with Stellex Capital.

This was to ensure there were no enforcement proceedings current or pending.

This due-diligence is a vital part of the acquisition as problems with licences can devalue businesses. In the worse-case scenarios, this can result in the acquisition aborting.

In a similar example, partner Jonathan Smith managed a team to carry out licensing due-diligence on two projects for Admiral Taverns’ acquisition of 137 Marston’s pubs and 150 pubs from Star Pubs and Bars (part of Heineken).

And we recently advised London-based investors Acropolis Capital Management – a family holding company with investment interests spanning real estate, public markets, hedge funds and private equity – on their $20m investment to help with the UK and international growth of Social Entertainment Ventures; the operators of experiencial brands such as Bounce and Hijingo – one of the new breed of bingo operators.

We give strategic licensing advice in relation to company voluntary arrangements (CVAs), administrations and general insolvency.

Once an operator enters a CVA, administration or another form of insolvency their premises licences lapses if held in the name of the insolvent company.

We give advice on how and when to transfer licences to safeguard against this happening. Ensuring there is no business interruption. It is a complicated area of law that can have huge consequences for operators if the wrong decisions are made at the wrong time.

If you have any questions about alcohol licensing, contact one of our alcohol licensing solicitors.

They will be more than happy to give you some initial advice on the best options for you.

Our licensing solicitors have certainly come across – and solved – whatever licensing legal problem you might be facing.

Here is a legal article by Jonathan Smith regarding what operators need to be aware of when a company is nearing the point of entering into a company voluntary arrangement.