LONDON (Reuters) - Faced with a partial reopening of their branches from July, many high street restaurant businesses in Britain risk disappearing from the high street or at least changing hands, as private equity owners decide whether to raise billions of dollars to snap up what they see as bargains.
Buyout funds have invested 6.1 billion pounds ($7.51 billion) of deal values across 69 transactions in Britain’s restaurant chains since 2014, Refinitiv data shows.
“Some private equity funds are concerned that, after a fairly quiet two years in M&A, that they are falling behind with their rate of investment. They will feel the need to make investments over the next six months or so,” Shaun Browne, co-head of UK Corporate Finance at Houlihan Lokey said.
Here’s a list of well-known brands, mostly owned by private equity funds, seeking to restructure or find new owners:
- Casual Dining Group, owner of Bella Italia, Café Rouge, las Iguanas, Belgo, Huxleys and Oriel, has filed a notice of intention to appoint administrators. The group, backed by private equity funds KKR KKR.N and Pemberton Capital Advisors, hired advisory firm Alix Partners and Kirkland & Ellis to explore options, including the sale or administration for all or part of the group.
- Italian restaurant chain Prezzo, owned by U.S. buyout fund TPG Capital, hired restructuring firm FRP Advisory to explore options.
- Burger chain Gourmet Burger Kitchen, owned by Johannesburg-listed Famous Brands, in April completed a company voluntary arrangement to renegotiate rents and shut stores. Its owner said it was withdrawing funding.
- Burger chain Byron, backed by private equity firm Three Hills Capital Partners, tasked KPMG to find potential buyers.
- Italian restaurant chain Carluccio’s has been bought out by Boparan Restaurant Group, the owner of Giraffe, after collapsing in March.
- Pizza Express, backed by Chinese private equity firm Hony Capital, is preparing to launch the restructuring of its 465 million pound debt pile due for repayment by 2022.
- Mexican-themed restaurant chain Wahaca appointed PwC to seek restructuring, including bringing in a new investor.
- Cote Brasserie, owned by buyout firm BC Partners, is exploring a wave of site closures, with Company Voluntary Arrangements (CVA) possible.
- Chiquito and Food & Fuel, owned by The Restaurant Group, and fast-food chain Benito’s Hat have been placed in administration.
- The British arm of Belgian bakery Le Pain Quotidien, owned by PQ Licensing SA, is running an emergency sale of the business.
- Steak chain Hawksmoor, owned by Graphite Capital, said on March 18 that it would shut all its locations.
Compiled by Clara Denina and Abhinav Ramnarayan, editing by Louise Heavens
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