Duke Street buys Wagamama from Lion Capital

Greg Gille
@unquotenews
25 March 2011

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Duke Street has acquired UK fast-food chain Wagamama from Lion Capital for an undisclosed amount.

Earlier reports however estimated the enterprise value to be around £215m. GE Capital, Investec and Lloyds arranged and underwrote a senior debt package to fund the acquisition, as well as working capital and capex facilities to support the company's development going forward.

Hutton Collins also backed the buyout with a mix of equity and mezzanine, securing a minority stake in the business. The firm has invested in Wagamama on two previous occasions, first in Graphite Capital's recapitalisation of the business in 2004, and later in the acquisition by Lion Capital in 2005.

The sale marks the end of a winding road for Lion Capital, who has tried to exit the company for more than three years now. After scrapping plans for an IPO in 2007, the private equity firm appointed Rothschild to run an auction process for the sale of its 88% stake in the business.

Morgan Stanley Private Equity, Investcorp and India Hospitality Corp were among the final bidders at the end of last year, but negotiations stalled over price.

Lion Capital bought a controlling stake in Wagamama from Graphite Capital in 2005, for £102.5m. The UK-based noodle bar chain has 105 outlets, including 70 in the UK, and employs more than 2,300 people. It generates turnover in excess of £100m.