Shares in Young & Co were flat on the FTSE AIM 100 after the brewery said it had acquired Geronimo Inns for £60 million.
Young & Co said that the acquisition gave it new growth opportunities and that it fitted well with its long-term expansion strategy.
Geronimo operates 26 food-led pubs, of which 22 are in London, three are at Heathrow and one is in Surrey. By adding Geronimo's estate to its own Young & Co's managed estate has been increased 20 per cent to 148 pubs.
The management of Geronimo will be incorporated into that of Young & Co, with Rupert Clevely, Chief Executive of Geronimo, becoming an executive of the Young & Co board.
In the full year to June 2010 Geronimo reported pre-overhead EBITDA of £6.1 million, a figure which is expected to rise to £8.1 million in the full year to June 2011. Geronimo also reported net debts of £30.6 million at the end of June of this year.
The acquisition is being funded by a £100 million five year bank facility with RBS and Barclays bank.
Stephen Goodyear, Chief Executive of Young & Co, said, "The acquisition of Geronimo, a business we have known for a number of years, represents an excellent opportunity to accelerate the growth of the Young's managed estate.
"The acquisition fits very well with our expansion strategy which is focused on high quality, food-led, managed houses in the London area, a strategy that we will continue to pursue with both the Young's and the Geronimo formats. Geronimo's team also brings considerable expertise in the operation of leases and concessions in high footfall retail locations such as airports and shopping centres and this represents a new growth opportunity for us.
"I am particularly delighted that Rupert Clevely has agreed to join our Board and that his senior
management team will be staying. We look forward to combining the best of the expertise from
both teams to drive the enlarged group forward."
Rupert Clevely, commented, "Young's is the perfect home for Geronimo and I am delighted that the Young's Board wants to continue to embrace and retain Geronimo's inimitable DNA. Key to our success is the entrepreneurial flair and individuality, proven food expertise and home-from-home hospitality for which Geronimo is renowned and which our customers will continue to enjoy.
"The continued involvement of my trusted team will ensure that Geronimo's unique spirit will be maintained and that the Geronimo footprint will develop alongside and as a complement to Young's as the combined business looks to expand both formats. "
By 09:25 shares in Young & Co were flat at on the FTSE AIM 100 at 610.00.