Exclusive – Crosstown acquired for £500,000 via pre-pack administration: Crosstown, the artisan doughnut and specialty coffee brand, was acquired by Karali Snack, part of Karali Group, via a pre-pack administration, for a total consideration of £500,000, Propel has learned. Propel revealed last week that the transaction included the acquisition of 27 operating locations, including the majority of the stores, market units, kiosks, concessions, and trucks, as well as the transfer of 140 staff, including the leadership team of the business. Crosstown has been working with its advisers from Interpath Advisory to explore investment options that could support its continued operations and its future expansion. According to the administrators report, Crosstown was loss-making for several years as a result of difficult trading conditions driven by a reduction in demand for premium products and the impact of supply side cost inflation. In the previous two financial years [2022 and 2023], the company made losses of £1.5m and £1.6m respectively. The management team led by chief executive Howard Ebison had been implementing a turnaround plan focused on cutting costs and repositioning the brand for the past year. The report said: “Despite the actions taken by the directors to address the challenges facing the business, trading continued to be challenging. In its historically stronger period of trading before the summer period, in the four months to April 2024, the business accumulated losses of £200,000. Management attributed these losses to the ongoing reduction in commuters following the pandemic and the impacts of an inflationary trading environment, which all significantly impacted Crosstown’s ability to generate positive operating cash flows. The company required further funding of circa £1.7m over the next year to fund ongoing trading and make repayments to overdue creditors, as well as to fund modest refurbishments and general capital expenditure for a select number of stores. However, despite the support of certain trade creditors and the directors’ best efforts, without a significant improvement in market conditions the company was ultimately unable to address the challenging trading conditions and secure any further investment or funding, which led to unsustainable cash challenges and creditor pressure.” The marketing process for the business generated interest from a number of parties on a variety of bases, though following further due diligence, only one offer was deliverable. One other offer was received from parties connected to the company. However, this offer was subsequently withdrawn and therefore was not deliverable. Propel revealed last month that Adam Wills, co-founder of Crosstown, was attempting to take back control of the business. Karali Group is led by Salim Janmohamed and Karim Janmohamed, and is a diversified, multinational hospitality and real estate platform operating franchises in the fast-food, casual dining and hospitality sectors. The company previously operated 74 Burger King restaurants, which were acquired by Burger King UK in October 2022. Foresight, the backer of Mowgli and Roxy Leisure, invested £3m in Crosstown in 2022. Crosstown features in the Premium Club Turnover & Profits Blue Book, the latest edition of which will be released on Friday (14 June) and feature 926 companies. Crosstown’s turnover of £7,563,368 for the year ending 31 January 2022 is the 738th highest in the database. The Blue Book ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. Companies can now have an unlimited number of people receive access to Premium Club for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email kai.kirkman@propelinfo.com to upgrade your subscription.

Exclusive – Punch paid £15.7m for ex-Wear Inns estate, Amber Taverns acquired remaining site: Punch Pubs & Co acquired the majority of the 25-strong, ex-Wear Inns business, which was placed into administration last year, for £15,680,000, while Amber Taverns purchased the remaining site in the portfolio for £525,000, Propel has learned. Propel revealed at the end of April that the Clive Chesser-led, circa 1,300-strong, Punch had acquired 24 of the sites, in a deal thought to be valued at around £15m. The pubs include The Black Bull in Morpeth, The Cross Keys in Washington, and The New Inn in Wetherby. Meanwhile, Amber Taverns acquired the remaining site – The Victoria in Whitley Bay – for £525,000. The former Wear Inns estate comprised 21 freeholds and four long leaseholds, located across the north east of England and Yorkshire. A sale of the business process was launched in February 2024 which “generated significant interest”. A report from administrators Interpath said: “Following the initial bid offer deadline on 13 March 2024, five parties had made viable offers for the entire portfolio. Our agents selected these five parties to engage with in further negotiations, in advance of a second phase offer deadline on 20 March 2024. In addition, we received a separate offer from Amber Taverns for The Victoria on an individual basis, which represented a significantly higher realisation for the site than would be achieved within a portfolio sale. The agents recommended the acceptance of Amber’s offer and as a result, further discussions were held with the five key parties to establish revised offers for the portfolio excluding The Victoria. Following the second phase offer deadline, final offers were presented to the secured lender with Punch emerging as the leading portfolio bidder, together with Amber Taverns’ offer for The Victoria. We completed a sale of the business and assets of The Victoria for £525,000 on 19 April 2024, with £1,003 of the proceeds being allocated to assets owned by the company. As part of the sale, 11 of the company’s employees located at The Victoria transferred to Amber Taverns. On 29 April 2024, the business and assets at the remaining 24 sites were sold to Punch for £15,680,000.” Propel revealed in November that Milton Portfolio Op Co 3, which operated the 25 sites and was owned by investment firm Aprirose, had appointed Ryan Grant and Howard Smith, of Interpath Advisory, as joint administrators. The business had a deficiency of £8.1m when it was placed into administration.