Nightcap (NGHT ) said it has conditionally raised £10 million at a price of 23p per share in a placing which has raised significantly more funds than originally indicated earlier this month.
The Company, which owns the London Cocktail Club (LCC) originally announced back on 4 May 2021 that it was seeking to raise around £4 million in order to fund the company’s UK roll out of the Target Bars' 'Tonight Josephine', 'Bar Elba' and 'Luna Springs' bar brands.
Nightcap outlined at the time that it also intended to use some of the proceeds to partially repay debt which it will assume in making its acquisition of the Adventure Bar Group.
By acquiring Adventure Bar Group, Nightcap will become the operator of a further nine bars. The bars being acquired are seven established themed bars located in popular London locations, a large outdoor bar, food and entertainment venue in Birmingham, a bar site opening in Birmingham on 17 May 2021 and a 50% interest in a central London roof-top bar.
Most of the acquired Target Bars provide a cocktail-orientated drinks offering. In addition, Adventure Bar Group has a pipeline of additional sites and Nightcap believes that the Target Bar brands have significant potential for national expansion to up to 40 locations.
The Board believes that the Acquisition will provide Nightcap with new customer offerings and significant brand roll out opportunities and that, in the medium term, there will be opportunities for synergies between the Adventure Bar Group and its existing family of bars.
Shares in Nightcap have more than doubled in value since the beginning of January 2021. The stock was trading 15.00% lower this morning at 25.5p following the announcement.
The Company highlighted to investors this morning that its placing has raised ‘significantly more funds’ than originally indicated following the receipt of strong investor demand.
“We believe it is the right time to have equity to invest on the back of the damage caused by multiple lock-downs in the last year,” commented Sarah Willingham, CEO of Nightcap.
She added, “The success of our fundraise from both existing shareholders and several new institutional shareholders shows just how much support there is for hospitality in the UK and specifically for our strategy of acquiring and growing drinks-led businesses in the sector.”
With the completion of our second acquisition and this substantial equity raise, Nightcap remains well capitalised to execute on its strategy by finding more like minded businesses and people to join our journey to become a leading bar group in the UK."
Nightcap is focused on taking advantage of the opportunity to acquire and grow 'drinks-led' hospitality concepts that focus on the consumers' social experience over the coming years.
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