BDO predicts increased M&A activity in pubs and restaurants

Mergers and acquisition activity in pubs, bars and restaurants is likely to surge in 2012, according to new research from the business advisory consultancy, BDO.

Head of restaurants and bars at BDO, David Campbell, said that they expect to see many private equity companies looking to cash in on consumers continuing to eat out.

“Eating out has been relatively unaffected in the consumer downturn and we see casual dining continuing to grow,” Campbell told the Financial Times. “With banks looking to offload pub assets and a number of profitable restaurant chains approaching the point where we would expect an ownership change, the market is ripe for M&A activity.”

He said that many companies will be looking to invest in restaurant chains and outlets in 2012, as they anticipate an easing of consumer spending in 2013. Campbell predicted that major high street chains including Pizza Express and Yo! Sushi could well see changes in ownership, all driven by private equity firms.

He added that the British pub industry is in a prime position for major consolidation. BDO figures show that as many as 5,000 pubs are currently for sale, with many banks looking to offload assets from distressed companies.