Horizon sells Eat to Pret a Manger

Kenny Wastell
23 May 2019

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Horizon Capital has agreed to sell UK sandwich shop chain Eat to former Bridgepoint portfolio company Pret A Manger.

The transaction bring an end to an eight-year holding period for Horizon, during which the company reduced its number of outlets from 110 to 94. However, its turnover rose from £85m at the time of the GP's acquisition to £94.9m in the year ending in June 2018, according to publicly available documents.

Financial details of the deal remain undisclosed, though the Financial Times cited people familiar with the matter who said the transaction valued Eat at £55-60m.

According to the documents, Eat generated EBITDA of £3.2m and a loss of £17.3m before tax in 2018. The business had an outstanding bank loan facility of £17.8m in addition to a revolving credit facility of £5m as of June 2018, the documents reveal.

The acquirer, which was sold by Bridgepoint to the Reimann family's investment vehicle JAB Holdings for £1.5bn a year ago, will look to convert the majority of Eat's locations to its Veggie Pret brand following the deal.

In recent years, Eat has focused on refurbishing many of its stores with a focus on increasing its speed of service.

Horizon was invested in Eat via £255m vehicle Lyceum Capital Partners Fund II, which closed in 2008.

Previous funding
Eat first received backing from institutional fund managers in 1998, when 3i provided it with £2.5m in growth capital.

Penta Capital then acquired a significant minority stake in the business, including shares owned by 3i, as part of a £39m refinancing in 2005.

Horizon (then known as Lyceum Capital) acquired a majority stake in Eat from Penta in a 2011 secondary buyout valued at less than £100m.

Company
Founded in 1996, London-headquartered Eat is a sandwich shop chain. The business operates from 94 sites and had a headcount of 1,600 as of June 2018.

People
Pret A Manger – Clive Schlee (CEO).
Eat – Andrew Walker (CEO); Andrew Aylwin (chairperson).

Advisers
Vendor – Spayne Lindsay (M&A); Travers Smith (legal).
Acquirer – Skadden Arps Slate Meagher & Flom (legal); PwC (financial due diligence).