Barracuda starts to fish for more cash

BARRACUDA Group, one of the UK's fastest-growing managed pub chains, has appointed Deloitte to review the company's funding structure.

The company, led by Mark McQuater, who set up the group in July 2000, says Deloitte has been approached to develop options for funding the business and its growth strategy and to reorganise its ageing debt structure over the next two to five years.

Barracuda operates in Perth, Kirkcaldy, Cambuslang, Paisley, Bathgate and Stirling. It is backed by private equity investor Charterhouse and debt support from a banking syndicate that includes the Royal Bank of Scotland.

"The company and its backers are keen to examine ways to support continued successful development of new openings in 2009, 2010 and beyond," said the company in a statement.

As part of this process, Deloitte will present a range of options to support the continued growth strategy of the company, including new openings.

Barracuda's focus is on pubs with food. Annual turnover in the year ended September 30 last year was 149m and ebitda (earnings before interest, tax, depreciation and amortisation) was up 12% to 37m over the same period.

The group has continued with its ambitious expansion plans and grown its pub portfolio to more than 220 units across its five brands: Smith & Jones, Varsity, Barracuda Bar, Juniper and Cape.

Barracuda started life in 2000 when McQuater went to the City and raised 135m. Most of this came from PPM, the private equity arm of Prudential, with extra capital from the Bank of Scotland and Royal Bank of Scotland.

Further acquisitions included 35 pubs from Enterprise Inns in a 50m deal; 61 from Ambishus Pub Company for 36.5m; and 50 bought from Wolverhampton & Dudley Breweries for 37.25m.

In 2005 Barracuda was the subject of a 262m secondary management buyout.

It now has the backing of Charterhouse Capital Partners LLP and last year increased its turnover by 19% to 127.1m.