Risk Capital Partners Buys Majority Stake in Red Hot World Buffet

Risk Capital Partners has closed its purchase of a majority stake in Red Hot World Buffet. No financial terms were disclosed. Based in the UK, Red Hot World Buffet is a restaurant chain.


Private equity investor Risk Capital Partners (“Risk Capital”) has completed its acquisition of a majority holding in Red Hot World Buffet to provide development capital for the restaurant group’s further expansion.
Red Hot World Buffet was founded in 2004 by husband and wife, Parmjit and Helen Dhaliwal. It now has seven large restaurants across the UK, employing 600 people with a turnover of £22m. The transaction value is not disclosed.
The leading buffet restaurant group, which serves English, Indian, Chinese, Italian, Tex-Mex and Japanese dishes, amongst others, has grown from one small site to having seven restaurants in Northampton, Milton Keynes, Liverpool, Leeds, Manchester and Cardiff, plus the new 20,000 sq foot restaurant in Nottingham that re-launched earlier this year.
Risk Capital’s investment provides development capital to upgrade the existing estate, as well as growth funding for the Group’s eighth site which is due to open in Leicester in 2014.
The business plan backed by Risk Capital will see the current management team remain, augmented by James Horler, initially in a part time capacity. James has previously grown restaurant businesses such as Frankie & Benny’s and La Tasca as Chief Executive. Risk Capital’s Luke Johnson is the newly appointed Chairman of the Group.
Pammie Dhaliwal, Founder and CEO of Red Hot World Buffet, commented: “This is an exciting time for us and all the staff who have been involved in making Red Hot World Buffet a success since we launched our first restaurant in 2004.
“Risk Capital’s investment solidifies our growth ambitions and provides the financial and strategic support to help us capitalise our market offering. We are looking forward to what the future holds.”
Luke Johnson said: “We have been talking to Pammie and Helen for over three years and are delighted to have made this investment. We believe the buffet dining space to be one of the fastest growing segments of the UK’s restaurant market and that Red Hot offers great choice and great value for money to its customers in these challenging times. We are looking forward to working with the Founders and the wider management team to help them in their ambitious growth plans.”
BDO LLP, the accountancy and business advisory firm, were lead advisers to Red Hot World Buffet. The team was led by M&A Partner Peter Hemington and Assistant Director Kieran Lawton, supported by James Gregson and Nicola Gibbs.Peter Hemington, M&A Partner at BDO LLP, said: “This deals highlights that M&A and investor appetite remains strong for innovative concepts in the restaurants and bars sectors.
“Pammie and Helen have continued to innovate and develop their offering across seven UK cities, creating hundreds of jobs in the process. Risk Capital’s investment and sector expertise will support the Group’s plans, in a deal that provides an exciting opportunity for both parties.”
Risk Capital was advised by Baker Tilly, CMS Cameron McKenna, Jelf Manson and Catalysis. Pinsent Masons acted as lawyers for the Company and the Founders, and JMW acted for the management team.
-EndsRed Hot World Buffet locations and stats
City Date opened Number of
Nottingham* 01/02/2013 500 7,000
Manchester 13/05/2011 525 8,500
Leeds 22/10/2010 350 6,500
Liverpool 17/10/2009 300 6,500
Cardiff 23/10/2011 300 6,500
Milton Keynes 17/06/2008 300 3,500
Northampton 17/09/2006 250 2,500 seats
Customers per week
* The first restaurant opened in Nottingham in 2004 at Goose Gate. The new Cornerhouse site opened in 2013 following a £2.7m fit-out.
Risk Capital Partners was established in 2001 by Luke Johnson and Ben Redmond, and focuses on investing in medium sized companies (£10m – £30m) across a range of industries. Typically it invests £3m to £15m of equity in any single company.
In addition to RHWB in the consumer space, RCP currently owns Patisserie Holdings (the owner of brands such as Patisserie Valerie and Baker & Spice), Bread Holdings (owner of Gails bakeries) and has had success with previous investments in the restaurant space with Giraffe, Signature Restaurants and Strada.
RCP also invests in the support services sector with current investments including APT Controls, Britain’s largest supplier of car park equipment. Previous investments include Integrated Dental Holdings, Britain’s largest chain of dentists, and recruitment businesses such as Interquest.
Transactions have ranged from development capital deals involving minority stakes to management buy-outs and buy-ins. Risk Capital Partners looks to partner with strong management, investing in companies with a compelling economic proposition and a sound business model.
Further information on Risk Capital Partners can be found at: www.riskcapitalpartners.co.uk
Accountancy and business advisory firm, BDO LLP, is the UK member firm of the BDO International network. BDO LLP has recently merged with PKF (UK) LLP to form a new force in the mid-market. The firm now employs 3,500 people across 23 UK locations, generating revenues approaching £400m.
The combined fee income of all the BDO Member Firms, including the members of their exclusive alliances, was $6.015 billion in 2012. The global network provides business advisory services in 138 countries, with almost 55,000 people working out of 1,204 offices worldwide.
BDO LLP has a clear ambition to be the firm known in the market for exceptional service delivered by empowered people. The 2011/12 Mid Market Monitor analysis – completed in April 2012 – shows that BDO has now indeed become market leader for client satisfaction – outperforming all its major competitors and the only organisation to see an improvement over the past three years.