Global investment firm KKR has announced that it will sell Australian Venue Co – one of Australia’s largest hospitality groups – to Hong Kong-based alternative investment firm PAG.

KKR paid circa $190 million in 2017 for a majority stake in what the group that was known as Dixon Hospitality at the time, with a portfolio of 48 leasehold venues. KKR’s objective with the group that was consequently rebranded as Australian Venue Co (AVC), was to partner and support the growth ambitions of its management team. This collaboration has resulted in venue growth of more than 300 per cent, with the group owning and operating a portfolio of over 210 pubs, bars, restaurants and event spaces across Australia and New Zealand.

David Lang, partner and co-head of KKR Australia and New Zealand, said, “AVC has established itself as a leader in Australia and New Zealand’s dynamic and constantly evolving hospitality sector. We are excited to have worked alongside Paul [Waterson] and AVC’s dedicated team to invest in the company’s expansion and believe that AVC is well positioned for the future. We wish the entire AVC team continued success with PAG.”

Australian Venue Co has undergone major growth since 2017, buying up portfolios of venues across the country, including the Coles-owned, 87-hotel Spirit Hotels portfolio, and most of the acclaimed Sand Hill Road portfolio in Melbourne, including the renowned Hotel Esplanade in St Kilda. It has also recently explored partnering with other brands,  opening two venues with Scottish brewer Brewdog.

AVC CEO Paul Waterson told Australian Hotelier at the beginning of 2023, that the group expects to acquire 25 venues a year, renovate another 25, and build five greenfields venues per year.

Rumours of KKR selling its investment in KKR have abounded for a few years now, with talks of roadshows and potential offers never coming to fruition, until now.

PAG’s acquisition of AVC marks the firm’s latest investment in Australia’s growing consumer sector. Previous investments include Craveable Brands, owner of QSR brands Red Rooster, Oporto, Chargrill Charlie’s and Chicken Treat; The Cheesecake Shop; and Cordina Farms. More recently PAG acquired and integrated together Patties Foods and Vesco Foods, leading manufacturers of some of Australia’s best-loved food brands including Four’N Twenty, Patties and Nanna’s. PAG has offices in Melbourne and Sydney.

Lincoln Pan,partner and co-head of PAG Private Equity, said the investment firm intends to help AVC continue to grow.

“We are very pleased to partner with AVC, a proven market leader with an exceptional management team and great potential. Our goal is to work with strong businesses and help them become even stronger in Australia. AVC has created some of the most unique and iconic venues across Australia and New Zealand, and we are looking forward to supporting them on their next stage of growth.”

Waterson  thanked KKR for its investment in AVC, and looked forward to working with PAG.

“This is an exciting time for AVC. We are grateful for KKR’s strong support in scaling the business over the years, growing our employee base from 780 to 8,500 people, and creating jobs through growth and investment in our venues. We look forward to working with our new partners in PAG, their investment affirms the strength of the platform and our future growth potential in Australia and New Zealand.”

The transaction is expected to close late 2023, subject to customary conditions, including regulatory approvals. Financial terms of the transaction were not disclosed.

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