KKR-owned AVC backs Coles' Australia liquor retail business

AVC, which stands for Australian Venue Co, received a reported A$190 million investment from KKR when it was known as Dixon Hospitality in 2017. It operates about 60 pubs, bars, and restaurants across Australia.

According to a release, the deal will see AVC take over the management of 87 pubs under Coles’ Spirit Hotels business, while Coles will manage 253 retail liquor stores under the Liquorland, First Choice, and Vintage Cellars brands. Coles’ other liquor outlets will not be affected.

AVC will receive all the profits for Spirit Hotels and Coles will receive all the profits for the retail liquor stores. The structure aims to allow both parties to focus on their core competencies while having joint oversight over the entire operation.

It comes as Coles pursues an extensive strategic review following a period of slow earnings growth and poor share performance. The stock picked up from a low of A$11.25 at the time of the announcement to A$11.34 as of mid-afternoon March 6. It was trading at A$13.00 as recently as mid-February.

AVC was founded in 2012 by Bruce and Michael Dixon. Bruce Dixon, who is the executive chairman, previously served as CEO of Spotless Group before and during Pacific Equity Partners’ ownership. Prior to KKR’s investment, the company was said to be targeting a public listing at a value of A$186 million.

KKR invested the company via its third pan-Asian PE fund, which closed in 2017 at $9.3 billion. Operational support for portfolio companies under the vehicle is provided by a team of about 60 PE investment professionals as well as the firm’s KKR Capital Markets division.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Australasia
• Buyouts
• Consumer
• Australia
• KKR
• Joint Venture