Nightcap Regulatory News (NGHT)

26 April 2022

Nightcap plc

("Nightcap" or the "Company" or the "Group")

Update on deferred consideration in relation to the acquisition of the Adventure Bar Group

Nightcap (AIM: NGHT), the owner of The Cocktail Club, the Adventure Bar Group and the Barrio Familia group of bars, is pleased to provide an update in relation to the deferred consideration payable for its acquisition of the Adventure Bar Group. The Board of Nightcap (the "Board") is pleased to report that, on the basis of its trading since its acquision, the Adventure Bar Group has achieved the milestones required for the payment of the all equity earn out component of the consideration for this acquisition significantly earlier than originally anticipated.

Background

On 4 May 2021, Nightcap announced the acquisition of the entire issued share capital of +Venture Battersea Limited, Adventure Bars Mid Limited and Adventure Bars Luna Digbeth Ltd (the "Acquisition"), being the companies that operate the Adventure Bar Group's Tonight Josephine, Blame Gloria, Bar Elba, Luna Springs, Escapologist and Nikki's Bar brands.

The consideration payable to the vendors of the Adventure Bar Group companies comprised of an initial tranche of 4,761,905 new ordinary shares of 1p each in the Company ("Ordinary Shares") which were issued on 14 May 2021, plus the issue of a maximum of a further 7,142,856 new Ordinary Shares to the vendors (the "Earn Out Consideration Shares"), dependent on the level of growth in adjusted earnings before interest, tax, depreciation and amortisation ("EBITDA") for certain of the Adventure Bar Group's bars over an up to two-year period commencing on 1 July 2021.

Earn out and Adventure Bar Group trading

The Board is pleased to report that, based on the Adventure Bar Group's unaudited management accounts since acquisition, the Adventure Bar Group has acheived the financial milestones required in order for all of the Earn Out Consideration Shares to be issued. Given the strong performance of the Adventure Bar Group since its acquisition, this has occurred on a significantly faster timeline than originally expected by the Board.

The crystallisation of the Adventure Bar Group earn out mechanism remains subject to, inter alia, the three vendors of the Adventure Bar Group remaining in employment on the date of the issue of the Earn Out Consideration Shares. As such, the Earn Out Consideration Shares could potentially be subject to change, but will be capped at a maximum of 7,142,856 Ordinary Shares to be issued at a price of 21p per share. The Board anticipates that the 7,142,856 Earn Out Consideration Shares will be issued on 29 June 2022 and admitted to trading on AIM in early July 2022 and a further announcement will be made in relation to this.

The acquisition of the Adventure Bar Group has been a very important step in Nightcap's buy and build strategy and the Board is delighted with the smooth integration of Adventure Bar Group's management into the Group's broader management structure, the performance of the Adventure Bar Group's brands and its management's ability to execute on Nightcap's ambitious roll-out plan.

The Board is very pleased with the performance of the Adventure Bar Group over the last 11 months since being part of the Group and, as such, the Board continues to be confident of the positive impact that the Adventure Bar Group will have on the Group for the remainder of the current financial year and beyond. In March and April 2022, the Adventure Bar Group acquired three new sites for its bars in Cardiff, Liverpool and Bristol, with several further new Adventure Bar Group site acquisitions being planned for announcement later this calendar year.

Tom Kidd, Managing Director of the Adventure Bar Group, commented:

"Like most businesses in hospitality Covid hit us hard, but it has been incredible to see how much our customers have enjoyed our venues since the reopening last year."

"Working with Nightcap has allowed us to focus on creating great experiences for customers across our existing sites and start the roll-out of our amazing brands, which we always believed had nationwide potential."

"I would like to thank Nightcap for recognizing our strong performance early, which has freed us up to focus on securing the best sites across the country for our continued roll-out."

Sarah Willingham, Chief Executive Officer of Nightcap, commented:

"I am delighted to congratulate Tom Kidd, Tobias Jackson and Bryan Lloyd on achieving the Adventure Bar Group earn out milestones well ahead of time. It is a phenomenal achievement and a testament to the quality of their leadership, the exceptional team that they have put in place and the brands they have built and continued to strengthen since the acquisition by Nightcap last year."

"They have managed to realise this whilst still setting themselves up for an aggressive expansion this year, by filling the pipeline with new sites, expanding their team, refining their offer and even rebranding two of their sites."

"Tonight Josephine in Cardiff, which opened its doors just four weeks ago, has hit the ground running, trading profitably from the very first week since opening, further strengthening our commitment to expand this popular brand across the UK."

Further details on the terms and the structure of the acquisition of the Adventure Bar Group are detailed in the announcement released by the Company on 4 May 2021.

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