London-based private equity firm Duke Street will pay roughly 215 million pounds ($349 million) for Japanese noodle chain Wagamama, buying the company from rival buyout shop Lion Capital, Reuters reported. Lion Capital took a majority stake in Wagamama in a 2005 deal valued at 102.5 million pounds.
(Reuters) – Private equity firm Duke Street agreed to buy wagamama from rival Lion Capital and aims to roll out the canteen-style Japanese noodle chain further in Britain and overseas, the two firms said on Thursday.
The deal values wagamama, founded in 1992 by Asian restaurant entrepreneur Alan Yau, at about 215 million pounds ($349 million), two people familiar with the situation said.
Lion, a consumer and retail-focused buyout firm, invested in wagamama in 2005, taking control from another private equity house, Graphite Capital, which kept a minority stake.
That deal valued the business at 102.5 million pounds, making Graphite more than 10 times its original investment.
“Wagamama has the potential, with additional funding and operational expertise from Duke Street, to extend its category leadership in the UK and accelerate its plans for international expansion,” said Duke Street partner John Harper in a statement.
Under Lion’s ownership, the chain has doubled the number of restaurants it operates in Britain to around 70. Wagamama says it serves about 12 tons of noodles a week.
It has also expanded internationally, adding three sites in the United States in Boston and inking franchise agreements for Europe, the Middle East and Australasia.
Lion held an auction last year, which attracted interest from rival private equity firms Investcorp, Morgan Stanley Private Equity and AIM-listed India Hospitality Corp (IHC.L), but offers failed to meet its price expectations.
(Reporting by Simon Meads; Editing by David Holmes) ($1=.6165 Pound)