Well, well, well! It seems like the American private equity giant, Apollo Global Management, is hungry for some British cuisine.
In a deal worth over £500 million, Apollo is set to acquire the owner of the popular London-based restaurant chain, Wagamama.
The Restaurant Group, which owns Wagamama, has agreed to the deal, which will see Apollo pay 65p per share.
If you’re wondering what’s so special about Wagamama, then you’ve clearly never had their famous ramen bowls or katsu curries.
The Japanese-inspired chain has been a hit with diners in the UK for years, and it seems like Apollo is hoping to cash in on that popularity.
The acquisition will give Apollo control over more than 400 restaurants across the UK, including Wagamama and other brands like Frankie & Benny’s and Chiquito.
This isn’t the first time that Apollo has dipped its toes into the restaurant industry. In 2019, the private equity firm acquired Qdoba, a Mexican fast-casual chain, for $305 million.
It seems like Apollo is betting big on the future of the dining industry, and this latest acquisition is sure to make a few waves in the UK restaurant scene.
The Big Deal
The Players
In this corner, we have Apollo Global Management, the American private equity giant with a long-term investment approach and access to capital. And in the other corner, we have The Restaurant Group (TRG), the struggling UK restaurant operator that owns the popular Wagamama chain.
The Price Tag
In a deal worth £701 million, Apollo has agreed to buy TRG at 65 pence a share, valuing the enterprise at an enterprise value of £716 million.
The Reaction
Shares surged after the announcement, with TRG’s share price up by more than 30%. It seems that investors are optimistic about the future of the company under Apollo’s ownership.
The Strategy
Apollo’s strategy for TRG is not yet clear, but it seems that the private equity firm is betting on the long-term potential of the restaurant industry. The acquisition of TRG fits in with Apollo’s broader strategy of investing in companies that it believes have strong growth potential.
Overall, the deal seems to be a win-win for both Apollo and TRG. Apollo gets access to a popular restaurant chain with growth potential, while TRG gets the capital it needs to turn its business around. It will be interesting to see how the deal plays out in the coming months and years.
Who’s Who in the Zoo
When it comes to the acquisition of The Restaurant Group, there are a lot of players in the game. Let’s take a look at who’s who in the zoo.
The Big Guns
First up, we have Apollo Global, the private equity firm that is set to acquire The Restaurant Group. With over $400 billion in assets under management, Apollo Global is a force to be reckoned with in the world of finance.
On the other side of the table, we have The Restaurant Group’s management team, led by Chairman Ken Hanna. With years of experience in the hospitality industry, Hanna and his team have been instrumental in building The Restaurant Group into the successful company it is today.
The Moneybags
Of course, no acquisition can happen without the money to make it happen. In this case, it’s Apollo Global who’s bringing the cash to the table, with a deal valuing The Restaurant Group’s shares at over £500 million.
The Underdogs
While Apollo Global may be the big name in this deal, there are other players who have been making waves in the restaurant industry. Activist investors have been pushing for change at The Restaurant Group for some time now, and it seems that their efforts have paid off with this acquisition.
Meanwhile, The Restaurant Group itself is no stranger to the restaurant industry, with a portfolio that includes popular chains like Chiquito, Frankie & Benny’s, Cafe Rouge, Bella Italia, Las Iguanas, and Banana Tree. With such a diverse range of brands under their umbrella, it’s clear that The Restaurant Group has a lot to offer to any potential buyer.
Overall, it’s clear that there are a lot of moving parts in this acquisition, and it will be interesting to see how things play out in the coming months.
The State of Play
The Good
Private equity giant Apollo Global Management has agreed to buy Restaurant Group Plc, the owner of Wagamama, in a deal worth over £500 million. The acquisition is expected to help the struggling company offload its leisure business, which has been a drag on its financial performance in recent years.
The deal comes at a premium of 34% on the Wagamama-owner’s closing price on 11 October, indicating that Apollo has faith in the company’s ability to improve its profitability. The acquisition will provide the capital needed to develop and improve content across the company’s sites.
The Bad
The Restaurant Group has been struggling with financial losses due to the macro-economic environment and increased competition. The company’s stock has been underperforming, and its leisure business has been dragging down its overall profitability.
The Ugly
While the acquisition is good news for the company, it also highlights the state of the restaurant industry in the UK. The fact that a premium is being paid for a struggling company indicates that the industry is facing tough times.
The acquisition also raises concerns about the future of the company’s employees, and whether they will be able to keep their jobs under the new ownership.
In conclusion, while the acquisition is a positive development for the Restaurant Group, it also highlights the challenges facing the restaurant industry in the UK.
The deal will provide the capital needed to develop and improve content across the company’s sites, but it remains to be seen whether the company will be able to turn its fortunes around.
The Future Forecast
With Apollo Global’s acquisition of The Restaurant Group, the future of Wagamama looks bright. The private equity firm has a reputation for making long-term investments, which means they are likely to take a strategic approach to the growth of the restaurant chain.
One area where Wagamama could see significant growth is in international markets.
The chain currently has a presence in 27 countries, but there is still plenty of room for expansion. With Apollo Global’s deep pockets and experience in global markets, they could help to accelerate Wagamama’s international growth.
Another area where Wagamama could see growth is in its menu. The chain has already made strides in catering to dietary restrictions, with a variety of vegan and gluten-free options. However, there is still room for innovation and expansion in this area. With Apollo Global’s resources, they could invest in research and development to create new and exciting menu items that cater to a wider range of dietary needs.
Overall, the future of Wagamama under Apollo Global’s ownership looks promising. With a long-term investment strategy and experience in global markets, the chain is well-positioned for continued growth and success.
Photo by Christine Van on Unsplash
