3i has sold its 42% stake in EAT, a premium end sandwich and coffee company, to Penta Capital in a £39m deal, of which Barclays has committed £18m. 3i has doubled its money on the investment.
3i originally acquired a minority stake in EAT in October 1997, backing husband and wife team Niall and Faith MacArthur to establish a high quality brand at the premium end of the sandwich take-away market. 3i has been a long term partner in the business – backing the company through four further investment rounds since the original investment. EAT currently operates from 45 stores across the country and has built a strong brand, based on a high quality, same day offering.
The funds raised will be used to expand the company nationally from 45 to 100 sandwich shops within three years. The company will dedicate significant investment in central kitchen appliances to drive continued product innovation, quality and freshness. Guy Harvey, previously finance director of Conran Restaurants, has been appointed finance director.
Eamon Nolan, 3i portfolio manager, said: “We have built a good relationship with EAT over the last 8 years and have continued to support the company in its ambitious expansion strategy. This is another successful growth capital deal for 3i, supporting value creation over the long term through a minority investment backing a strong entrepreneur in an exciting market.”
The 3i deal team included Eamon Nolan, portfolio manager and James Cox, portfolio manager. The shareholders received corporate finance advice from Ben Bailey and Sam Fuller of Altium Corporate Finance. 3i received legal advice from Sarah Massey at Wragge and Co and the company was advised by DLA. Due diligence was arranged by Grant Thornton and Dickson Minto.