Bridgepoint sells Pret to JAB Holding

Kenny Wastell
29 May 2018

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Bridgepoint has sold UK-headquartered coffee and sandwich shop chain Pret A Manger to JAB Holding, the investment vehicle of the Reimann family, in a deal reportedly valued at more than ТЃ1.5bn.

It is understood the sale generated a 6x money multiple for Bridgepoint, following a 10-year holding period, and valued the business at 15x EBITDA. The GP was invested in the company via Bridgepoint Europe III, a 2005-vintage vehicle that closed on €2.5bn.

Under the vendor's tenure, the business has undertaken a domestic and international expansion strategy. At the time of Bridgepoint's initial investment, the company operated from 200 shops, 175 of which were in the UK, 14 in the US and 11 in Hong Kong. It now operates 530 stores, with 371 in the UK, 92 in the US, 34 in Hong Kong, 32 in France and two in China, in addition to a further 24 worldwide that are operated as joint partnerships.

It is understood the business quadrupled its turnover during the GP's tenure, with profits increasing threefold to more than £100m.

The group also launched its Veggie Pret brand in recent years, which only offers vegetarian or vegan options. According to the company's website, there are currently three Veggie Pret locations, all of which are in London.

Bridgepoint had reportedly been considering the possibility of a public market exit for Pret, with Unquote sister publication Mergermarket reporting that the GP had mandated JP Morgan, Jefferies, Credit Suisse, Barclays and Piper Jaffray to explore a potential New York listing. However, the report stated that the exit was run as a dual-track process, with JP Morgan tasked with fielding serious approaches. China-based Fosun Group was also involved in the bidding process, according to Mergermarket.

JAB has a track record of investing in the space, having acquired Nordic coffee chain Espresso House from Herkules Capital for NOK 2.2bn in June 2015. It also owns Caribou Coffee and Peet's Coffee & Tea chains in the US, in addition to Krispy Kreme Group.

Previous funding
Bridgepoint acquired a majority stake in Pret in 2008, in a £345m deal alongside co-investor Goldman Sachs. The GP then acquired Goldman Sachs' 14% stake for £50m in June 2012.

Pret then undertook a refinancing in June 2013, securing £375m in new loans to replace existing debt and repay shareholder loan notes to Bridgepoint. The GP received a £150m dividend via the refinancing.

Unquote understands that Bridgepoint provided £407m in capex in order to fund the company's growth strategy during its decade-long tenure.

Company
Established in 1986, London-headquartered Pret is a coffee and sandwich shop chain. The company currently generates a turnover of £879m, according to a statement. It reported a turnover of £776m in 2016, according to publicly available documents, with EBITDA of £93m.

People
Bridgepoint – William Jackson (managing partner).
JAB Holding – Olivier Goudet (partner, CEO).
Pret A Manger – Clive Schlee (CEO).

Advisers
Vendor – JP Morgan (corporate finance); EY (corporate finance); Travers Smith (legal).