Houlihan Lokey Advises Loungers

Transaction: Loungers - Fortress Investment Group

Houlihan Lokey is pleased to announce that its long-standing client, Loungers PLC (AIM:LGRS; Loungers), has been acquired by funds managed by affiliates of Fortress Investment Group (Fortress) by way of a recommended scheme of arrangement. Following a focused sale process, the offer was first announced in November 2024, followed by an increased and final offer of 325p per share in January 2025. The transaction values the entire issued and to-be-issued share capital of Loungers at £354.4 million and implies an enterprise value of £366.6 million.

Loungers operates café bars, café restaurants, and roadside dining across the U.K. through three complementary brands: Lounge, Cosy Club, and Brightside. Loungers has a strong track record of growth and profitability, driven by an ambitious rollout strategy and like-for-like sales growth. During FY24, Loungers opened a record 36 sites and expects to continue to open around 36 new sites per year. As of December 2024, Loungers had a total of 282 sites in its portfolio across its three brands. In FY24, Loungers reported revenue of £346.6 million and an adjusted EBITDA of £43.5 million.

Fortress is a leading global investment manager with approximately $49 billion (£39.5 billion) in assets under management. Fortress has previous experience investing in the U.K. hospitality sector, including direct investments in Majestic Wines, Punch Pubs & Co, and, more recently, Vagabond.

Under the terms of the transaction, shareholders may elect to exchange some or all of their shares for Bidco Rollover Securities as an alternative to the cash offer.

At the time of the transaction, the deal represented:

  • A 36.6% premium to the closing price of 238p on the last business day before the original announcement date.
  • A 35.9% premium to the volume weighted average price of 239.2p in the 12 months prior to the original announcement date.

Houlihan Lokey acted as exclusive financial advisor, Rule 3 advisor, and nominated advisor to Loungers. It is the third time we have advised Loungers, having previously advised on its sale from Piper Private Equity to Lion Capital in 2016 and its IPO in 2019.*

*Selected transactions were executed by Houlihan Lokey professionals while at other firms acquired by Houlihan Lokey or by professionals from a Houlihan Lokey joint venture company.

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