KKR sells Australian Venue Co to PAG

One of Australia’s largest food and beverage hospitality businesses is set to change hands later this year after New York-headquartered KKR reached a deal to sell Australian Venue Co (AVC) to Hong Kong-based PAG.

The transaction sum was not disclosed by the parties involved but sources close to Reuters confirmed it was worth more than $1.4 billion, which is much higher than the $1 billion figure speculated for a deal with BGH Capital earlier this year.

Run by former Healthscope and Spotless executive Paul Waterson, AVC has 210 pubs, bars and restaurants across Australia and New Zealand – a significant increase on the portfolio of 50 leasehold venues when KKR took over in 2017.

The acquisition fits a different profile to PAG’s other consumer investments in Australia, including Craveable Brands which owns Red Rooster, Oporto, Chicken Treat, and more recently Chargrill Charlie’s – businesses that give the group a level of vertical integration as it also has a stake in chicken producer Cordina Farms.

In early 2022 PAG exited its investment in The Cheesecake Shop through a sale to River Capital, and used the funds to go shopping in September to buy frozen food brands Four’N Twenty, Patties and Nanna’s.

PAG Private Equity co-head and partner Lincoln Pan says the group is very pleased to partner with AVC, a “proven market leader with an exceptional management team and great potential”.

“Our goal is to work with strong businesses and help them become even stronger in Australia,” Pan says.

“AVC has created some of the most unique and iconic venues across Australia and New Zealand, and we are looking forward to supporting them on their next stage of growth.”

Paul Waterson of AVC says this is an exciting time for the company with PAG’s investment affirming its strength and future growth potential.

“We are grateful for KKR’s strong support in scaling the business over the years, growing our employee base from 780 to 8,500 people, and creating jobs through growth and investment in our venues,” he says.

“AVC has established itself as a leader in Australia and New Zealand’s dynamic and constantly evolving hospitality sector,” adds KKR Australia and New Zealand co-head and partner David Lang.

“We are excited to have worked alongside Paul and AVC’s dedicated team to invest in the company’s expansion and believe that AVC is well positioned for the future. We wish the entire AVC team continued success with PAG,” says Lang.

The transaction is expected to close in late 2023, subject to customary conditions including regulatory approvals.