UK’s largest nightlife firm to merge with Rekom

18th December, 2020 by Nicola Carruthers

Deltic, the UK’s largest nightclub group, has been bought out of administration and will merge with Nordic bar operator Rekom, a move that could save more than 1,300 jobs.

Deltic operates more than 50 late-night venues across the UK

Last week, Deltic, which operates more than 50 late-night venues across the UK, filed a notice of intention to appoint administrators. The move came after the company suffered a huge sales loss this year due to the pandemic, with nightclubs in the UK closed since March.

Rekom will buy the majority of the nightclub operator out of administration, with the Nordic group taking over 42 of Deltic’s sites immediately. Deltic operates nightclub chains, including Oceana, Pryzm, Cameo, and Bar and Beyond. Financials details of the agreement have not been disclosed.

The merger between the two companies will see Deltic become known as Rekom UK. The union is expected to commence once Covid-19 restrictions are lifted.

The Copenhagen-headquartered group said the Deltic acquisition is a ‘major stepping stone into the UK nightlife industry and part of Rekom’s ambition to become a leading nightlife operator in Europe’.

Rekom is the largest nightlife group in the Nordics and operates more than 130 bars and clubs in Denmark, Finland and Norway. The firm has received backing from Danish private equity firm Catacap since 2018.

‘Huge potential’ 

Rekom Group CEO Adam Falbert said: “We have been looking at the UK market for the past few years as part of our ambition to become one of the largest pan-European nightlife groups. When the opportunity came to take over a strong and well-run group like Deltic, it was a question of finding the right set up to make it happen.

“We see a huge potential in the UK market for late-night bars and clubs and are certain that the industry will bounce back as soon as Covid-19 restrictions are lifted.”

The deal was also established as both firms ‘are driven by people with longstanding experience in the nightlife industry’. As such, it was ‘hugely important’ that Deltic’s current CEO Peter Marks continues in his role as CEO of the new company, Rekom UK. Furthermore, crucial members of the Deltic management team will remain in their current roles.

Marks said: “When Rekom emerged to buy us out of administration I was really happy. We were – through no fault of our own – put in a situation where I was watching our business fall apart.

“It was having huge personal consequences for our many fantastic employees whom we have had to let go. With Rekom we get an owner that knows the industry, who will reopen most of the venues we have had to close down and are ready to invest in developing our position in the UK. So, with that in mind it was an easy choice to say yes to become part of the future of Rekom.”

Prior to the pandemic, Deltic had a turnover of more than £106 million (US$143m) and earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the current year was forecast to be £12m (US$16m). The firm has employed 3,000 workers during peak times of the year. The pandemic saw the firm reduce its workforce by 1,000, while some of its venues were temporarily operated as bars that could open during the day.

With nightclubs remaining closed in the UK, Rekom will use this time to integrate the Deltic venues into its organisation. The firm will leverage synergies between the two companies, such as using the same IT platform and supply system.

Falbert added: “We are aware that Covid-19 is still very much among us, and that the restrictions on our business will remain for some time to come. But we are optimistic that the vaccines already approved in the UK and hopefully soon to be followed in the rest of Europe will spell an end to the restrictions.

“I am certain that we will see the industry bounce back quickly when they are lifted. And not least, I’m certain that are our guests are eager to get out to have the time of their lives after being under lockdown for almost a year.”

Rekom has also suffered declining sales this year due to the pandemic. However, the firm said it witnessed a ‘record-breaking’ 2019 and has since acquired both capital and lending facilities to ensure it emerges from the pandemic in a ‘strong position’.

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