KKR’s Australian Venue Co continues acquisition spree, buying out the Saturno family in SA

The consolidation in the Australian pubs sector continues, with Australian Venue Co buying eight South Australian venues to add to a bevy it snapped up last year.

Paul Waterson, chief executive of Australian Venue Co. Picture: Supplied

Australian Venue Co, which is majority owned by private equity giant KKR, has bought eight pubs and four bottle shops in South Australia as consolidation in the sector continues apace.

And AVC chief executive Paul Waterson said there’s plenty more scope for acquisitions, with venues running hot as Australians swap lockdowns for catching up with mates, along with a still very fragmented sector.

The Saturno family, which has been a stalwart of the SA hospitality scene for five decades, sold their remaining venues to AVC, following a previous selldown of five hotels in 2007 to ALH Hotels for a rumoured $110m.

The Saturnos, who trade under the well-known “Booze Brothers” brand in SA, sold 16 bottle shops in 2000.

In a statement released by AVC, the Saturnos said brothers Adrian and Leon “have retired from the industry after 50 years and they wish to thank all the wonderful people they have worked with’’.

The eight new venues add to 10 currently operated by AVC in SA and more than 180 nationwide.

Listed outfit Hotel Property Investments, which works in collaboration with AVC on some projects, buying the real estate while AVC buys the leasehold, said it had bought seven of the venues for $66.1m.

HPI already owns three venues in SA.

AVC, which flirted with listing on the ASX earlier this year before pulling the float due to the troubled hospitality market, bought 11 venues nationwide last year across Queensland, Victoria and South Australia.

Mr Waterson told The Australian on Thursday the company’s venues were currently outperforming the same periods in 2019 - the most recent comparable, pre-pandemic time frame.

“What we’re seeing generally is a very strong bounce-back to the point now where our venues’ revenue is up on the same period in FY19, the last uninterrupted trading period,’’ Mr Waterson said.

“Whenever the pubs are open and operating on relatively unimpeded trade, people are just really keen to get back in for a beer and a parma or parmy, depending on where you’re from.

“Trade’s been incredibly strong and we expect it to continue’’

Mr Waterson said about 87 per cent of pubs were still owned by individual publicans, “so it’s still one of those sectors where you expect to see consolidation going forward’’.

AVC is the second largest pubs group in Australia, but is still well behind Endeavour Group’s ALH Group, which owns more than 330 venues.

Sydney pub tsar Justin Hemmes now owns more than 70 venues across pubs, restaurants and nightclubs, and has been on his own buying spree, splashing $150 million on new pub acquisitions during the pandemic including Cheeky Monkey’s in Byron Bay and Norton’s Pub in Leichhardt.

In SA Ed Peter’s Duxton Pubs has bought eight pubs to date, but has an ambition to grow quickly to become one of the nation’s top three pub owners and to list on the ASX within the next three years.

AVC made a net profit of $18.8m in the 2021 financial year, up from a $107.4m loss the previous year, records filed with the corporate regulator show.

The company received $31.1m in JobKeeper payments and according to the company’s most recent financial report “additional support has been provided by government in the form of grant income, combined with deferrals and waivers of various taxes and licence fees’’.

“The group has taken rapid action to mitigate the impact of all temporary venue closures

with a clear focus on cash management and cost reductions, and supporting our staff to ensure we are able to effectively resume trading as soon as restrictions are lifted,’’ the report says.

“All venues have been open when not temporarily closed due to government restrictions.’’

The group’s full year sales revenue increased from $489.8m to $579.75m.

AVC’s purchase price for the new SA venues was not disclosed.

Newly acquired SA venues

- The Unley – Parkside

- The Mile End – Mile End

- Avenues Cafe Bar – Adelaide

- The West End Tavern – Adelaide

- The Colonist – Norwood

- Mick O’Shea’s Hotel – Hackham

- The Duck – Coromandel Valley

- Victoria Hotel - Strathalbyn

Originally published as KKR’s Australian Venue Co continues acquisition spree, buying out the Saturno family in SA