PE-backed Wagamama mandates Goldman Sachs for funding options

According to a recent report by the Times, analysts have estimated that a potential deal could value the chain of noodle restaurants at more than £750m. The GPs acquired the business in March 2011 in a deal that, at the time, was reported by Unquote to have given Wagamama an EV of £215m.

The company is currently pursuing US expansion, with five existing restaurants in New York and Boston, and a further two sites in New York due to open within 12 months. The US expansion strategy is similar to that currently being undertaken by Pret A Manger, which was recently sold by Bridgepoint to JAB Holding in a deal reportedly valued at more than £1.5bn.

Wagamama has performed strongly in recent years, despite the challenges facing the casual dining and wider consumer space in the UK. According to publicly available documents, the group generated a turnover of £266m and adjusted EBITDA of £45.5m in the year ending in April 2017, up from £230m and £38.7m respectively year-on-year.

Another of Hutton Collins' portfolio companies, Byron, has felt the impact of the downturn in the casual dining space. Earlier this year, the burger chain announced it was to close up to 20 of its 67 restaurants as part of a restructuring deal that also saw Three Hills Capital Partners buying half of Hutton Collins' stake in the company.

At the time of its most recent financial results, Wagamama said it had to mitigate the effects of sterling's Brexit-related devaluation by securing fixed-price contracts for ingredients and distribution during its 2017/18 financial year. As of April 2017, Wagamama had a headcount of around 5,000 across 128 restaurants.

According to statistics cited by Wagamama, the business has outperformed the wider UK market by 8.2% over the course of a four-year period.

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• Topics
• Exits
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• Hutton Collins
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