Brunning & Price owner TRG set to be sold

The Restaurant Group (TRG), the owner of the Brunning & Price pub estate and restaurant brand Wagamama, is set to be sold to Rock BidCo Limited (Bidco) – a new vehicle from US private equity firm Apollo Global Management. 

The boards of directors for both businesses have announced that they have reached an agreement on the terms and conditions of a recommended all cash acquisition by Bidco of the entire issued, and to be issued, ordinary share capital of TRG. The acquisition is currently expected to complete in early 2024. 

The deal values TRG’s entire issued, and to be issued, ordinary share capital at approximately £506m on a fully diluted basis, and implies an enterprise value of £701m and a multiple of approximately nine times TRG’s adjusted EBITDA for the 12 months ended 2 July 2023. 

Currently operating approximately 380 restaurants and pubs throughout the UK, TRG’s principal trading brands are Wagamama and Brunning & Price, the latter of which regularly wins county titles at the National Pub & Bar Awards.

"TRG operates a diverse portfolio of some of the UK’s leading hospitality brands," says Ken Hanna, chair of TRG. "As a result of ongoing positive management actions and the margin accretion plan we announced in March this year, the group has recovered well from the challenges of the pandemic and the cost of living crisis.

"This is evidenced by the continued strength of our trading performance versus the broader hospitality sector and the share price increasing 55% this year. In addition, the TRG board and management have reviewed in detail the strategic options available to the group, resulting in the announcement of the proposed sale of the Leisure business. The TRG board continues to have confidence in the plan, but is cognisant of the premium and the certain value of the Apollo offer against the backdrop of a challenging macro-economic environment. As such, the TRG directors intend to unanimously recommend the offer to TRG shareholders."

In September 2023, TRG announced a proposed disposal of its Leisure business, comprising 75 trading sites and associated restaurant and management team employees to the Big Table Group. The disposal is expected to complete on 30 October 2023, with TRG paying a cash contribution of £7.5m to the Big Table Group, subject to certain cash, debt and working capital adjustments.

For the twelve months up to the end of the interim period ended 2 July 2023, TRG achieved total revenue of £927m and Adjusted EBITDA of £77.6m. As stated in TRG’s interim results for the 26 weeks ended 2 July 2023, each of the Wagamama, Pubs and Concessions businesses have seen strong like-for-like sales growth, market share gains and delivered year on year volume growth.

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