Lion Capital, formerly Hicks Muse Tate & Furst Europe, is acquiring a controlling stake in Wagamama, the UK noodle bar chain, from its majority shareholder, Graphite Capital. The transaction, which is expected to close next month, values the business at £102.5m.
Wagamama’s senior management team, led by chief executive Ian Neill, will be retaining a significant stake in the company. Graphite Enterprise Trust and an investor group led by Graphite are also reinvesting in the business. This reflects their continued confidence in the company’s growth prospects.
Graphite Capital, at the time Foreign and Colonial Ventures, acquired the business in 1996, for just under £4m. Last year Graphite completed the refinancing of Wagamama, in a transaction which valued the noodle restaurant chain at £63m. The transaction gave Graphite Capital a return of over five times its investment. It also provided Wagamama with £13m in capital expenditure and overdraft facilities to finance the development of the business both in the UK and abroad.
Sales in the business have grown annually by an average of 32% and EBITDA by 41% over the past three years.
Graphite Capital partner, Andy Gray, said: “Wagamama is a prime illustration of our extensive record of supporting consumer businesses as they roll out core concepts. We have been delighted with the development of Wagamama over the last nine years. Through the continued shareholding of Graphite Enterprise Trust we look forward to participating in its future growth with Lion Capital’s backing.”