Secondary buyout of Wimpy

Bank of Scotland has bought Wimpy the UK burger chain in a secondary management buyout totalling GBP15 million. The deal provides an exit from a 12-year old investment by 3i, Bridgepoint Capital and Lloyds TSB Development Capital. Bridgepoint reports a return of more than three times the money invested on this deal, its eighth exit this year.

Bank of Scotland’s Integrated Finance team provided both debt and equity for the new transaction. John Davison, who leads Wimpy’s management team, said: “I am delighted to be working with Bank of Scotland. They have been involved with us since 3i led the original buyout in 1990 and this latest move cements the relationship even further.”

Once owned by United Biscuits, Wimpy was sold to Grand Metropolitan (now part of Diageo) in 1989. Grand Metropolitan converted some of the sites into Burger King outlets and then sold the remaining 220 table service restaurants to three of the company’s directors, led by Max Woolfenden, for GBP10 million in April 1990.

Founded in 1954 Wimpy now operates 300 restaurants, making it the largest independently owned, franchised restaurant chain in the UK and Ireland. Outlets include table service restaurants, express units found in leisure and shopping centres and motorway service areas and a recently launched chicken fast food chain called Dr Beaks.

Rival chain Burger King is also currently the subject of private equity interest, with Texas Pacific Group, Goldman Sachs, Bain Capital, The Blackstone Group, Thomas H Lee, Madison Dearborn Partners, Apax Partners and Hicks, Muse, Tate & Furst all reportedly interested in the company. Listed British company Diageo, which can expect to get between $2 billion and $2.3 billion for the business, is selling Burger King.