Voyager Pub Group

Transition from a managed to a tenanted portfolio enhanced revenues


Voyager Pub Group consisted of a UK portfolio of unbranded, largely managed pubs. Managed pub companies act as retailers, directly operating the pubs they own, employing the staff and bearing the expense of maintenance and development. 

Investment strategy 

Asset-Backed: The Voyager Pub Group was made up of 982 unbranded, managed pubs and 6 leased pubs across England, Scotland and Wales, the vast majority of which were freehold properties.

Requiring Fundamental Change:  Due to a decline in beer volumes and increasing costs, pubs that had once been viable as managed pubs had become more suited to a motivated and entrepreneurial tenant. It was believed that changing to a tenanted business model would significantly enhance value by increasing the cash generated from the portfolio, reducing the cost base and improving the quality of the cashflow available for future securitsations. Substantial operational and procurement synergies with Terra Firma’s other pub companies were also identified.

Creating value 

  1. Transforming strategy

    • By converting the portfolio from a managed to a tenanted estate, significant value was unlocked. A programme to reduce head-office and operational expenses and to transfer of responsibility for capital expenditure and maintenance of the pubs to individual tenants significantly reduced costs while also creating lessees who were appropriately incentivised to run efficient, profitable pubs.
    • Substantial operational synergies were realised and supply discounts negotiated by combining the purchasing power of Voyager with other Terra Firma pub companies.
  2. Strengthening management

    • A new senior management team was established to manage the lease conversion programme, drawing on talent from the seller, Bass plc, and key senior managers from its other pub businesses as well as secondees from Terra Firma.
  3. Developing through capital expenditure

    • Voyager executed a small number of investment projects to enhance value on sale or open market letting.
  4. Lowering the cost of capital to create extra upside

    • The conversion from a managed to a tenanted estate increased the cash generated from the portfolio, allowed for the elimination of large portions of the cost base and improved the stability of the cash flow available for a future securitisation.

Status of Investment: The Voyager Pub Group investment has been fully realised. At the time of sale, Terra Firma was in the process of refinancing the acquisition debt. Given the attractive terms offered by a consortium of trade and financial buyers, Terra Firma decided to sell Voyager, together with Unique, to the consortium.

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