Business Growth Fund Backs Mexican Food Chain

Business Growth Fund, established to help fund UK small and medium sized businesses, has made its first investment in the North West, with a 3.25 million pounds ($5.21 million) investment in Mexican street food chain, Barburrito. Founded in 2005 by Manchester- based entrepreneurs, Morgan Davies and Paul Kilpatrick, Barburrito is a chain of fast-casual Mexican restaurants that offer healthy food to eat in or take away. The business now operates from six sites in Manchester, Liverpool and Leeds and employs over 100 people.

PRESS RELEASE

Business Growth Fund (BGF), established to help the UK’s fast growing smaller and medium sized businesses, today announced its first investment in the North West, with a 3.25 million pounds ($5.21 million) investment in award-winning Mexican street food chain, Barburrito.

This is BGF’s fifth deal in three months, making it currently one of the most active investors of long-term growth capital in the UK and bringing its total investment in fast growing companies to £37 million to date.

Founded in 2005 by Manchester based entrepreneurs, Morgan Davies and Paul Kilpatrick, award-winning Barburrito is a chain of fast-casual Mexican restaurants that offer healthy food to eat in or take away. Having started as a single unit in Manchester and the UK’s first ever burrito bar, the business now operates from six sites in Manchester, Liverpool and Leeds and employs over 100 people.

Net revenues for FY 2012 hit £4 million and like-for-like net sales are up 20% on last year. Over the last two years the business has invested heavily in operations, branding and its supply chain to enable rapid expansion. Barburrito’s rapidly growing popularity with consumers is due to it consistency in serving fast, fresh and healthy Mexican food.

BGF’s £3.25 million equity investment will fund an active rollout programme with the business planning to triple its number of restaurants to c18 sites over the next four years. The bulk of the new restaurants will be in prime locations in London. As a result of this expansion, Barburrito expects to create approximately 250 new jobs.

Mexican food is one of the fastest growing sectors in the restaurant industry at present. In particular, burritos bars are taking off and are expected to be the growth sector of the industry over the next 3 years.

Following BGF’s investment, Colin Hughes will join the board as a non-executive director, bringing additional experience in the food retail sector. Hughes was previously on the boards of Pret a Manger and EAT, where he was involved in rolling out 100 new sites.

Andy Gregory, BGF’s regional director for the North of England, commented:

“Barburrito has a fantastic product, a strong vibrant brand, ambitious management and an excellent operational platform. These are strong foundations for growth and the basis for our decision to invest.

“Having established the UK’s first ever burrito bar, Morgan and Paul have successfully pioneered fresh Mexican food in the UK and it is fast becoming one of the most popular parts of the food and drink market. The business has demonstrated strong trading in the North West and is now well placed to bring its winning formula to the London market. This is where our capital and expertise comes in and we look forward to working with the team as we move into their next stage of growth.

“This is the first investment led by our Manchester office and as such represents a significant landmark for BGF. We are seeing a strong pipeline of investment opportunities across the North of England, a clear indication that businesses here are recognising the value that a supportive equity investor can bring to the table.“

Morgan Davies, joint MD and founder of Barburrito, commented:

“We have made great progress since starting as a single site in 2005. In the last two years we have opened three new stores and doubled the size of the business. We believe that the time is right to roll out our award winning formula to a national customer base and we knew that we needed additional funding to achieve this.

We are excited about partnering with BGF to take Barburrito to the masses. It was important for us to find the right partner, an investor that is able to offer more than just money. BGF has demonstrated that they not only share our enthusiasm for the sector but can bring valuable advice, expertise and high level contacts to the table.”

Paul Kilpatrick, joint MD and founder of Barburrito, also commented:

“Our first burrito bar was opened in the UK in Piccadilly Gardens, Manchester and we have since opened a further five stores in the North West of England. We have a proven concept, an excellent product and a strong brand. BGF’s capital will help support our expansion into London and the rest of the UK. We are hugely excited about the opportunities that lie ahead for us in this rapidly growing sector.

“BGF’s investment will allow us to expand into the London market and create approximately 250 new jobs. We are actively looking for high density locations, populated by office workers, shoppers, tourists and students with a busy lunch and some weekend trade.”

The business will be assisted by Ward Griffiths Associates to identify and select sites for the expansion programme. Barburrito was introduced to BGF by Corporate Finance and Investment business Seneca Partners. Legal advisers to BGF were Pinsent Masons and financial due diligence was undertaken by Grant Thornton. Existing shareholders were advised by Freeth Cartwright LLP and Hill Dickinson.

Barburitto has won a number of prestigious awards since launching, including the ‘BBC Best Newcomer Award’ at the Manchester Food & Drink Festival and ‘Best Quick Bite’ at The Metro Food & Drink Awards.

High resolution images are available for the media to view and download free of charge from

http://www.vismedia.co.uk

Ends

Contacts:

Corinna Osborne, Equity Dynamics – 07825 326 440

corinna@equitydynamics.co.uk

Emily Weston, Equity Dynamics – 07825 326 442

emily@equitydynamics.co.uk

Notes to editors:

About Business Growth Fund:

Business Growth Fund has been established to help Britain’s fast growing smaller and medium sized businesses. Growth potential is the key criteria. BGF will invest between £2m and £10m per business in return for a minimum 10 per cent equity stake and a seat on the board for a BGF director. BGF will provide long-term equity investment for those growing companies that today do not have access to this source of capital. As such BGF hopes to be a catalyst for growth among smaller UK companies.

BGF is an independent company with capital of up to £2.5 billion, backed by five of the UK’s main banking groups – Barclays, HSBC, Lloyds, RBS, and Standard Chartered. BGF is managed completely autonomously with an independent management team.

BGF is one of a range of initiatives designed to forge a new relationship between the banking sector and UK businesses, and BGF works in close collaboration with the British Bankers’ Association as well as other key business organisations across the UK.