The partnership between American hospitality giant Delaware North and Open Arms Hospitality has split, as each cite opportunities and pending acquisitions.
Delaware North (DN) operates hundreds of hospitality venues across four continents, serving over half a billion customers each year.
In March it announced an acquisition strategy for Australia and New Zealand, particularly in the pub and gaming sectors. DN already holds a portfolio spanning all mainland States, as well as Auckland, Wellington and Queenstown.
The company’s interest in the region emanates from several years’ consideration, for which it engaged Open Arms Hospitality, comprising Craig Shearer and Jason Sheather of the former Armada pub group, owners of Beer Deluxe, and Simon Gardner, formerly with Pegasus, to assist and advise on acquisitions.
This month saw the buying begin, with DN taking on the Shafston and Aspley Hotels in Brisbane from Colin Macleod’s Oz Pub Group, for a combined total around $32 million.
DN executive director Andrew Lester says they are currently looking at venues in Brisbane, including the CBD, northern NSW, Adelaide and Darwin, as well as a “range of other assets” including holiday parks.
The dramatic increase in focus Down Under has brought the relevant resources into the company’s Australian office, reducing the need for the local consultancy of Open Arms.
“They’ve done a good job, and we wish them all the very best for the future,” offered Lester. “It doesn’t change our focus on what we’re doing; we are actively looking for more and more assets.
“We like the way Queensland works, and the businesses we’ve bought are operating very well so far. The guys at Open Arms were certainly instrumental in assisting in that area.”
Despite deep pockets, DN has not grown to be a global hospitality player by paying overs, and is running a tight ruler over offerings.
“There’s plenty around, but it’s about whether we can buy at the right price. From a pub perspective we’re very keen on Queensland and NSW at the moment, it just depends on the price. We have our own internal checks and balances, if it doesn’t hit the model it just won’t get over the line.
“If vendors are smart and prepared to do deals, we’re there, but we won’t buy it unless we think we can grow it.”
Having bought and rejuvenated in Brisbane themselves, the Open Arms team is happy to give full attention back to their own operations, having “achieved what we set out to do” with DN.
“We thoroughly enjoyed our time working with Delaware North, and wish them nothing but the best for the future,” offers Shearer. “They have some great people on board and I’m sure they will continue to be successful. We set up the internal management team and infrastructure for [DN] to continue on operating without us, and hopefully grow on the solid foundation established already.
“This move will allow us to focus more heavily on our core business, which is obviously owning and operating our own venues.
“We have recently finished renovating our Plough Inn in Southbank Brisbane, and will now start looking for further acquisition / development opportunities across the country.”