The deal is believed to be Circa $75m according to sources close to the transaction. The entire MPK freehold portfolio was sold to a newly formed syndicate known at Investment Management Group. Nick Butler of Pub Brokers & Advisory was exclusively retained to find a buyer via a targeted, off-market campaign for the groups’ five assets in NSW’s Central West. Nick Butler refused to confirm or comment on the sale price.

MPK Hotels, led by respected hoteliers Nick McKechnie and Nelson Kelly, have built an impressive portfolio over a decade of clever acquisition and asset improvement.

The decision to sell was not made lightly, as it includes three separate DA Approvals for gaming smoking solutions at their largest hotels. Recognising the importance of “leaving something in it for the next bloke”, and having enjoyed the first uptick from population shift to the Central West, the MPK boys agreed that it was time to hand over the reins to a new owner that recognised the significant remaining upside that sits within the portfolio.

“We rang Nick Butler late last year and asked him to meet us in Bathurst to ask for his honest feedback about the chances of selling the portfolio at the price we needed. We have no doubt that the key to this sale was keeping it quiet to allow all of us to work through the challenges of selling five pubs at the same time”, said McKechnie.

The 5 MPK Hotels include:

• The Royal Hotel ORANGE – RECORD REGIONAL SALE (lasted a fortnight with Robin Hood Sale also in Orange
• The Dudley Hotel BATHURST – Record Sale Price for Bathurst
• The Castlereagh Hotel DUBBO – Record Sale Price for Dubbo
• The Federal Hotel WELLINGTON – Record Sale Price for Wellington
• The Federal Hotel MUDGEE – Record Sale Price for Mudgee

Nelson and Mandy Kelly met working together at the South Dubbo Tavern, a pub built by his father, many moons ago. “We’ve worked full time together in this business and we’ve decided it’s time to spend more time together away from work, and with the kids, before they pack up and move away” Nelson offered. “Nick and I are sticking around to help provide a smooth transition for the new owners in the short term. We love the pubs and the staff that run them and it will be business as usual for our loyal customers”. McKechnie shares Kelly’s view that it’s time to hand over the keys in order to spend more time with his family – “I’ve spent the best part of the last decade on the road. I’m not sure my wife is ready to see more of me, but my kids are”.

Purchased by Investment Management Group Hotels (IMGH), the acquisition represents the first major hospitality acquisition for the Canberra-based investment group. Recognising the impressive MPK Hotel portfolio, IMGH plans to leverage the success of the group, further evolving these properties and their offerings.

According to IMG Chief Executive Officer, Matthew Clowry: "The past few years have seen exciting and significant growth across the Central West NSW region and we are delighted to have made this acquisition. The MPK ownership team has done an impressive job of growing this iconic portfolio of hotels and developing best in class teams to support their success. Our intention is to leverage these foundations to extend and evolve the hospitality experience for the people of Orange, Bathurst, Wellington, Mudgee and Dubbo ."

The hotels are underpinned by very strong maintainable earnings across food, beverage and bottle shop sales. Passive income streams driven by robust accommodation numbers from Dubbo and Orange are further bolstered by 110 poker machine entitlements across the five freehold hotels, with the new owners planning to activate the approved DAs to incorporate modern, sophisticated solutions to match the impressive physical fleet of machines that already exist.

The MPK team are left with two leasehold hotels, including the Western Star Hotel in Dubbo which is also for sale on a re-stapled, freehold going concern basis. It’s expected the announcement of the portfolio sale will make the Western Star hot property.

The sale represents a landmark deal for Pub Brokers & Advisory in its first 12 months of operation.

When asked for comment on the sales process, Nick Butler replied: "This is obviously an important sale and adds plenty of weight to the theory that strong regional assets deserve to be held in the same esteem as the larger metro pubs. I could wax lyrical about with language more suited to private equity “metrics”, but this is all about buying quality hotels that will provide excellent returns in a low interest rate environment. The pub space is earthy and grounded, based on the skill of its people; the inherent value of the building and land; and the importance of these places in the community. Once you get those aspects right, the return on investment naturally follows.”

Butler added: "I would like to thank Nick and Nelson for trusting me with the process. As with all of these off-market sales, discretion was of utmost importance. Staff were only informed of the sale after contracts were exchanged, which in itself is a modern miracle in the pub space.”

The announcement comes hot on the heels of Pub Brokers & Advisory’s sale of the Illawong Hotel in Evans Head to a Laundy / Fraser Short / Tindall syndicate, with more announcements from the firm expected over the coming weeks.

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