Café, bar and restaurant chain Loungers to be sold for £338 million

A giant chain of cafés, bars and restaurants that started life in the West Country with one venue and just a few thousand pounds is set to be sold to US investors for £338 million. Loungers, which runs the Lounge, Cosy Club and Brightside outlets has operations in Exeter, Plymouth, Barnstaple, Newquay, Truro, Falmouth, St Ives, Newton Abbot, Paignton, Totnes and Babacombe.

Loungers opened its first Lounge bar at a former opticians in North Street, Bedminster, Bristol, in 2002. The three founders started the multi-million-pound operation with just £10,000. It boasted record revenues of £283.5m 2023.

It now operates 280 venues around the UK. US investment firm Fortress Investment Group said it has made an offer for the UK hospitality group, valuing the company at £338m.

Loungers chairman and co-founder Alex Reilley said the group has “come a long way” since first opening, adding: “We are more ambitious than ever and we see Fortress as being an ideal partner to help us take Loungers into the next phase of its growth journey.”

Fortress said it thinks Loungers has a “strong and differentiated position”, having grown its locations and sales in recent years “in spite of the recent challenges faced by the wider hospitality sector”.

The group’s managing director, Domnall Tait, said: “This growth, and management’s continued commitment to the business, give us confidence in the company’s growth potential and in the opportunity to increase value.”

Fortress has previously invested in British firms including Majestic Wines and Peach Pubs & Co. Loungers primarily operates its cafés and bars in suburban high streets and small town centres with its Cosy Club restaurants in city centres.

The US firm has offered 310p for each Loungers share, which represents a premium of about 30% to its closing price on Wednesday. The deal values the entire share capital of Loungers at about £338.3 million, the firms said.

Loungers, listed on the London Stock Exchange, needs the approval of its shareholders for the acquisition to go ahead. Fortress intends to make the purchase through a newly formed investment vehicle. It marks the latest London-listed firm to strike a deal with an international private equity group.