EDISON INVESTMENT RESEARCH LIMITED (LON:KEFI) Nightcap (NGHT): Initiation - A heady cocktail
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Edison Investment Research Limited
London, UK, 15 December 2020 Nightcap (NGHT): Initiation - A heady cocktail With the launch of Nightcap, entrepreneurial management with significant experience in developing successful bar groups is seizing a clear-cut opportunity to build a major drinks-led UK hospitality business. The increased availability of target sites at attractive rents, sharply reduced competition and shifting consumer preferences highlight extensive changes beneficial to Nightcap, which have only been accelerated and enhanced by COVID-19. London Cocktail Club (LCC) looks a strong first move for Nightcap as it is both popular and well-regarded in its own right - and highly scalable. This acquisition is likely to be just the start.
As a base for assessing underlying profit without structural changes and COVID-19, LCC's pro forma EBITDA uses results for FY19, enhanced by efficiencies and site maturity, plus a full year for openings based on trading up to February 2020 and head office/one-off adjustments. For a total consideration of £7.5m, which assuming a pro forma EBITDA of £1.8m gives an exit EV/EBITDA multiple of 4.2x.
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1154939 15-Dec-2020