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Changes at Dixon Hospitality

There’s been plenty of movement at the Melbourne-based Dixon Hospitality Group.

The bottom line is that Bruce Dixon’s pub operation has been emptied of its assets. But it’s continuing and changes are afoot. Dixon Hospitality is entering a new stage.

The latest statements lodged with the Australian Securities and Investments Commission tell the full story.

Back in June this year, private equity company KKR agreed to buy a controlling stake in Hospitality in a deal that valued the group at $190 million.

Closer examination reveals they did more than just buy a controlling stake – they actually acquired the whole business.

"On 30 June 2017, the shareholders of Dixon Hospitality Ltd entered into an agreement for the sale and purchase of all of their shares to a third-party buyer (Canoe transaction)," the financial report says,

The term “canoe transaction” refers to the KKR sale. It has nothing to do with water.

Dixon Hospitality owned 40 pubs and a brewery at the end of the financial year.

With total pub acquisition costs of more than $10 million, it made a net profit of $243,000.

The financial documents reveals that the sale had not settled at that time due to "conditions precedent". This the "consent of certain landlords to a change of control". In other words, the landlords had to agree to the change of owners.

Dixon Hospitality has informed the Sydney Morning Herald’s CBD section that the transaction was settled at the end of September. KKR had refinanced the debt and it injected more equity.

“KKR's investment will position the company for long-term success. It was also important for us to maintain a shareholding within the management team,” Dixon Hospitality CEO Paul Waterson told the Sydney Morning Herald.

And Bruce Dixon, who backed off from a float of the pub group earlier this year, will have enough on his hands. He is still executive chairman so he’ll be scouting around for fresh acquisitions.


7th December 2017