Mercantile investing €28m to upgrade hotel and pubs empire
Pub and hotel group is valued at €50m and targets 30pc growth as US investment giant buys out Danu
The Mercantile Group, which will now be wholly owned by a US-based company, is targeting revenue growth across its pubs of 30pc after it completes an ambitious refurbishment plan.
EMI-MR, which is controlled by Irish-born, America-based businessmen Michael Breslin and Maurice Regan , has agreed to buy out minority shareholder Danu Partners.
Danu is owned by Mark O'Meara and Setanta Sports founders Leonard Ryan and Mickey O'Rourke. The deal is believed to have placed a net asset valued of around €50m on the Mercantile Group.
Last May, Mercantile settled a legal dispute between former shareholder Frank Gleeson and his fellow investors, which led to a carve-up of the portfolio.
Mercantile now owns seven units in Dublin - Whelan's, Opium, Nolita, The George, Pichet, The Mercantile and Café en Seine. It is understood that Danu's decision to sell its stake in the business was arrived at after the court case was settled.
The Mercantile Group will now continue to invest in the company under a €28m programme.
Pat Burke, chief executive of Mercantile, told the Sunday Independent that the biggest element of the plan is a €20m expansion of the Mercantile Hotel. The plan to increase the property to approximately 100 rooms will be lodged next month and the building next door to the Mercantile has been bought to facilitate this.
Nolita, which was formerly the Dragon, has reopened this year following a €2m overhaul and revenues have doubled since the refurbishment. Opium on Wexford Street is reopening on September 27 following a €3m revamp.
Planning has been lodged for Café en Seine's refurbishment, with the company aiming to spend up to €4m on it early next year. The plan includes a new open garden area.
A refurbishment of Bridie's bar at The George has been completed and an expansion and refresh is planned for popular music venue Whelan's.
Burke said that when the plan is completed next year, revenues for the group are forecast to increase by 30pc on an annualised basis. This does not include the expanded hotel, which will be completed in 2019.
Meanwhile, Danu, which owns 80pc of Smith & Wollensky (S&W) in the US, made a decision to focus future investment into a business where it is the majority owner, sources said. Danu owns S&W with EMI-MR in London, while Regan is a partner in the US operation. The business is understood to be evaluating a number of acquisition opportunities to increase the scale of the business. The company has revenues of $60m with ambitions to increase this to $100m in the next year.
The owners have spent $4m on a restaurant in Wellesley, Massachusetts, and sold the Las Vegas restaurant but plans to relocate to new premises in partnership with one of the large casino groups. Danu was unavailable for comment.
Sunday Indo Business