Bridgepoint buys minority stake in Itsu

The deal follows the GP’s cooperation with Itsu founder Julian Metcalfe, who also founded previous Bridgepoint portfolio company Pret A Manger.

Bridgepoint held a majority stake in Pret A Manger from 2008-2018, initially acquiring a stake in the business in a £345m deal alongside Goldman Sachs and investing via Bridgepoint Europe III. The exit to JAB Holding at the end of the GP’s 10-year investment period was reportedly valued at £1.5bn.

The investment in Itsu will back the company’s growth plans, which will include the opening of 100 new sites and the creation of 2,000 jobs in the UK over the next five years, according to a statement.

Sky News reported that the deal could value Itsu at up to £100m.

Although some of its centrally located sites have been closed since September 2020, Itsu said in the same statement that it hopes to re-open the remaining closed stores in the near future.

Bridgepoint is currently deploying equity via vehicles including Bridgepoint Europe VI. The fund held a final close in December 2017 on €5.7bn and invests €125-500m in companies with enterprise values of €200m-1.5bn. The fund has a four-year investment period and made its first platform investment in February 2019, according to Unquote Data.

Many fast food and restaurant chains suffered under the coronavirus lockdowns in place across much of Europe throughout the past year. Unquote reported on the challenges for the sector in April 2020.

The restaurants and bar sector saw a record year for aggregate buyout value in 2019, with 17 deals totalling more than €7bn. However, the pandemic led, unsurprisingly, to a 10-year low in yearly aggregate buyout value in the restaurant and bars sector in 2020, according to Unquote Data. The nine buyouts that took place in 2020 totalled €436.5m; these included Partners Group’s acquisition of French restaurant chain Côte from BC Partners, as well as Epiris’ acquisition of Casual Dining Group.

Activity in the sector has not yet returned to previous levels, with three buyouts totalling €285m recorded to date in 2021, according to Unquote Data. However, Yo! Sushi, a portfolio company of Mayfair Equity Partners, was considering an IPO in April 2021 following significant growth in the US, the Sunday Telegraph reported. The sector has also seen three exits to date in 2021; in April, TDR Capital-backed Euro Garages acquired Leon from Spice Private Equity and Active Partners in a deal valued at around £100m.

With consumer demand expected to return to or even exceed previous levels once the coronavirus vaccination programme advances across Europe, Bridgepoint’s investment in Itsu is also an indication of the prospect of returning stability for the sector.

Company
Founded in 1997 and headquartered in London, Itsu is an East Asian-inspired fast food chain that sells healthy food including salads, soups and sushi. The firm also manage a grocery business for Asian food, selling its products in supermarkets and health food shops in the UK. The company expects to reach revenues of £170m in 2022. It posted revenues of £116.6m in 2018, versus £105m in 2017, according to its latest financial statements.

People
Bridgepoint – Benoit Alteirac (partner).
Itsu – Julian Metcalfe (founder).

Advisers
Equity – Travers Smith (legal); Alvarez & Marshal (financial due diligence).

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