Waterson reflects on Sand Hill Road buy
Australian Venue Co (AVC) CEO, Paul Waterson, spoke to Australian Hotelier about the acquisition of eight Sand Hill Road pubs, and what that means for the business.
In a major turn of events for the pub industry, AVC announced on Wednesday that it had purchased the majority of the Sand Hill Road portfolio (excluding Waterside Hotel). CEO Paul Waterson spoke to Australian Hotelier about the acquisition, stating that the venues were a great fit into their 150+ venue portfolio, and particularly within their stable of Melbourne venues.
“They are classic Melbourne pubs, and then within that you have a couple of real icons. I think most people would say that The Espy is the best pub in Melbourne, and Garden State is in the top five. So being able to acquire those pubs that are really consistent with our other Melbourne classic pub venues was really attractive for us.
“I think the other thing that the Sand Hill Road guys have been able to do is breathe new life into beautiful old heritage pubs. You’ve got pubs that have operated for well over 100 years, and hopefully will continue to do so for 100 more,” Waterson added.
As part of the acquisition, which is expected to settle in the first half of April, AVC will be taking on 580 of Sand Hill Road’s staff up to the venue manager level. Waterson and the AVC team began meeting with staff at the eight venues yesterday, with more work to integrate personnel to occur closer to the settlement date.
While excited to take on all of the venues, Waterson understands there is a much higher level of scrutiny attached to running the famed Espy.
“You’ve really got to honour the legacy of the pub, and it’s certainly a pub we won’t be changing much, if anything, of, because it has been incredibly successful.
“You’ve got a brilliant dynamic of different food and beverage offerings. We look at our pubs in our portfolio, and there’s always a pub that suits whatever demographic you are a part of. I think The Espy is unique in that it’s probably got whatever floats your boat in terms of pub, regardless of your demographic.”
Noting the importance of live music at The Espy, the CEO confirmed that AVC intends to fully support and invest in the pub’s live music program. As for the other seven venues, Waterson suggested that there were no immediate plans for major renovation, but that AVC strategy is to reinvest at least two per cent of turnover into its venues each year.
A broader outlook
Prior to the Sand Hill Road buy, the last multiple-venue acquisition for AVC was the joint venture with Coles to purchase Spirit Hotels in Queensland. In the twelve months since, the investment has started to pay off for the newly named Queensland Venue Company, with venue growth in excess of five per cent in those venues.
“They’re going incredibly well. In the venues where we’ve already put capital in and redeveloped them, we’ve got revenue up between 30 and 50 per cent. So we know that they’re quite responsive to development, and we know there’s an unmet demand for more contemporary food and beverage offerings in the Queensland market,” explained Waterson.
With such hefty acquisitions, rumours have abounded for many months of a public float of the company, but Waterson says it might not necessarily happen – and if it does, it’s all about timing.
“Given 80 per cent of the business is owned by KKR, it’s inevitable that at some point they would look to either IPO or sell the group at the right time. Then certainly management would stay with the business going forward.
“But you need the right time for that to occur, and that’s not only internally. The business is going really well, but you need to make sure that the broader markets are there and receptive to an IPO as well. So when the right time comes along, I’m sure they’ll let us know and bring us along the journey.”