Wagamama seeks new owners for global growth

by XPRESS, 04 June 2018

The company, chaired by Allan Leighton, has appointed Goldman Sachs to review what is described as “strategic growth options” for the business, reports The Times.

While a sale to a trade buyer is not being ruled out, preferred bidders are likely to be among the big American private equity firms with the funds to ignite Wagamama’s fledgling operation in the US.

Duke Street and Hutton Collins, the company’s present owners, are understood to have been encouraged to press ahead with the appointment of advisors by the sale last week of Pret A Manger to JAB Holdings, the German food sector investor, for £1.5bn.

Analysts said applying a similar multiple of 15 times’ earnings would value Wagamama at more than £750m.

While fellow restaurant groups such as Jamie’s Italian, better burger brand Byron, Carluccio’s and Prezzo are using Company Voluntary Arrangements to close loss-making sites, Wagamama has continued to drive sales via both organic growth and new openings.

In March, the company reported an 8.2% increase in its UK like-for-like sales in the third quarter, an acceleration on 7.1% second-quarter growth.

Its total turnover rose by 12.5% to £72.1m in the three months to 28 January 2018, lifting revenues for the first 40 weeks of its financial year to £229.5m, up 13.5%.

The group, which was founded in London in 1992 by Alan Yau, operates 130 outlets in the UK and five in the US and has another 51 franchised restaurants around the world.

It is planning another two openings in New York in the next 12 months.

Duke Street and Hutton Collins, who paid private equity firm Lion Capital £215m for Wagamama in 2011, are believed to be open to retaining a minority stake alongside a new lead investor.

Article credit: Propel info