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Nightcap seeks £3.5m to boost M&A

UK-based Nightcap is aiming to raise up to £3.5 million (US$4.4m) to help reach its goal of becoming the nation’s leading bar group through acquisitions.

Nightcap acquired The Piano Works earlier this year

Founded in 2020 by former Dragons’ Den star Sarah Willingham, Nightcap currently owns and operates 46 bars across the UK, following acquisitions of chains such as The Adventure Bar Group, Piano Works and The Cocktail Club.

The group is now aiming to raise funds by issuing up to 70 million new ordinary shares at a price of five pence each. The company has already raised £750,000 (US$953,000) through 15m shares.

In addition to the fundraising, the board is also considering raising additional capital after receiving offers for ‘significant’ investment support.

Since its listing on the London Stock Exchange in January 2021, the company has been on a mission to become the leading bar group in the UK through acquisitions and ‘organic roll-out’.

To reach this goal, Nightcap said it needed to ‘strengthen’ its balance sheet.

Nightcap’s board expects more opportunities in the coming year for ‘further consolidation of a significant part of the premium bar segment’ as the sector goes through ‘structural changes’.

Willingham, CEO of Nightcap, said: “We believe that a once-in-a-generation opportunity currently exists in the late-night bar sector to create a substantial market-leading group of the most popular and much-loved late-night bar concepts.

“It was always our intention to position Nightcap as the preferred consolidator in the premium bar sector and with this fundraising we intend to continue our efforts to create the UK’s leading bar group.

“A combination of businesses struggling with significant debt from the Covid period, ongoing macroeconomic challenges from the cost-of-living crisis, and rail strikes have all escalated and accelerated the opportunity for consolidation, as we see a number of companies from across the sector considering their future strategic options.”

Earlier this month, Nightcap revealed it had held talks with UK-based Revolution Bars Group about a potential deal to buy the business.

Willingham also highlighted a “more positive outlook” for the future as wages rise, and inflation and interest rates drop.

She continued: “Over the last 18 months, we have built a robust and professional management and leadership infrastructure at Nightcap and our team is capable of doubling the number of bars that it manages without the need for Nightcap to make significant further investment.”

Bar chains in Great Britain reported a double-digit sales drop in April, marking the sector’s fourth month of declines.

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