CBPE nets 78% IRR on Côte sale to BC Partners

Greg Gille
14 July 2015

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CBPE Capital has sold its stake in UK-based brasserie chain CУДte Restaurants to BC Partners after just two years at the helm.

Financial details were not disclosed, although the deal is understood to have valued Côte in the region of £250m.

BC invested via its BC European Capital IX fund, which closed on its €6.5bn hard-cap in 2012, along with a moderate amount of leverage. According to a source close to the situation, CBPE did not launch a formal sale process but was instead approached directly by BC.

The sale allowed CBPE to reap a money multiple of 2.9x its original investment in Côte and an IRR of 78%. The GP had bought the restaurant chain in September 2013. Côte's management team will retain a significant stake in the company following the sale to BC.

The buyer stated it would continue the roll-out of Côte's restaurants; it also mentioned potentially developing or acquiring other restaurant concepts.

Previous funding
CBPE secured a majority stake in French bistro chain Côte in a deal thought to be worth in the region of £100m in mid-2013. The investment came from CBPE's Fund VIII, which closed in February 2010 on £405m.

The deal came after a prolonged process, stretching out over an estimated 10 months, unquote" reported at the time. Côte owner Richard Caring had hired Canaccord Genuity Hawkpoint at the end of 2012 to oversee the sales process.

Private equity firms appeared to be the main bidders in the process, with Bridgepoint, LDC, Equistone, TA Associates and Investcorp all reported to have been interested.

Since then, Côte has opened 23 new restaurants and the business has created 1,300 new jobs, according to the GP. CBPE added that the company's EBITDA has grown by 60% since the 2013 buyout. Côte also opened a development kitchen in London where chefs work on developing new recipes.

Company
Established in Wimbledon in 2007, Côte specialises in French brasserie-style food. Côte currently operates 67 restaurants, against 44 at the time of CBPE's original investment.

The chain currently employs 2,700 people; it generates revenues of around £110m, against £50m or so when CBPE bought the business, with pre-tax profits in excess of £20m.

People
Matthew Tooth led the deal for BC. CBPE was represented by Ian Moore.

Advisers
Equity – Dickson Minto (Legal).
Vendor, management – Reed Smith (Legal).
Debt – Allen & Overy (Legal).