Global investment firm KKR buys majority stake in Dixon Hospitality

By Vanessa Cavasinni, editor Australian Hotelier

The global investment firm, KKR, is set to pay $190 million for a majority stake in the fast-growing hospitality group.

Dixon Hospitality, which operates 48 venues – mainly pubs but also a number of restaurants and bars, including the newly opened rooftop bar Untied in Barangaroo (pictured) – had initially looked to launch an IPO, but suspended its roadshow after interest from a few private equity firms. After months of due diligence, KKR has struck a deal with the group led by Bruce Dixon to become the majority stakeholder.

“We are extremely pleased to welcome KKR as an experienced partner. We have known and held the KKR team in high regard for a long time, and their investment is a strong endorsement of the outlook for our business. We’re confident this partnership will position the company for long-term success,” stated Dixon.

With a focus on food and beverage, Dixon Hospitality venues do not including any gaming – a point which has made other prospective investors wary of financing stakes in the business. The sale comes days after Moelis Australia purchased Redcape for $677 million – comprised of significantly fewer venues at 25 pubs, which are focused on gaming.  However Dixon Hospitality have made a strong case for their business model – one which appeals to KKR.

“KKR is proud to partner with Dixon Hospitality, a leading player in the Australian hospitality industry with a strong focus on delivering a differentiated dining experience to customers across the country. We are excited to work together with Dixon Hospitality’s experienced team. This exemplifies our focus on partnering with proven entrepreneurs to help create an exciting future for the business,” said Scott Bookmyer, member of KKR and head of KKR Australia.

Gareth Woodbridge, principal at KKR Australia, added: “We are impressed by the strength of Dixon Hospitality’s team, business model and operations across its diverse portfolio of food and beverage venues. This is an exciting time for Australia’s hospitality sector, and KKR is committed to supporting the business to achieve its long-term growth ambitions.”

In a twist of fate, Dixon Hospitality purchased several Keystone Group venues in late 2016, after the Sydney-based group went into receivership. The company was dissolved after not being able to finance $80 million in debt, to none other than KKR.

The proposed investment into Dixon Hospitality will be made via KKR’s recently closed Asian Fund III, worth $9.3 billion.

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