Penta Capital has acquired a substantial stake in London-based sandwich company EAT, allowing fellow private equity firm 3i to liquidise its share in the company and providing capital for expansion plans.
Penta’s £39m investment will be used to increase the number of outlets to 100 shops within three years and to invest in EAT’s central kitchen. The company has already either identified or secured a number of new sites in Greater London, as well as some of the UK’s major regional cities and at a number of transport hubs and shopping and visitor attractions.
3i is liquidating a 42% stake. EAT’s founder and managing director, Niall MacArthur, a former global investment banker, is increasing his equity stake in the company. In addition, Barclays has committed £18m to the business.
MacArthur will continue to lead the existing EAT managerial team as managing director and Penta’s Torquil Macnaughton will be appointed to the board as a non-executive director.
In addition, Guy Harvey joins as finance director. Previously, Harvey was finance director at Conran Restaurants. The board otherwise remains unchanged, with Faith MacArthur as brand director, Colin Hughes as retail director and John Herring as non-executive director. Herring is also non-executive deputy-chairman of Wetherspoons, the pub group.
For the year to June 30 2005, EAT turned over £29.1m. Turnover is forecast to increase to £37.7m for the current year. The UK sandwich market was worth £3.5bn in 2003 (Mintel) and is predicted to expand by 7% to 8% per annum over the next few years.
“Following on from our successful flotation of La Tasca, the UK’s largest casual dining Spanish restaurant chain, earlier this year, EAT fits perfectly with Penta’s investment focus,” Penta’s Macnaughton said.