Electra tucks into £100m UK restaurant deal

The investment by the London-listed trust is the latest example of private equity’s appetite for UK restaurant chains

Electra Partners has agreed to acquire a majority stake in the UK franchise of TGI Fridays, an American-styled restaurant chain owned by Sentinel Capital Partners and TriArtisan Capital Partners.

The transaction value was undisclosed, but according to a market source, the deal value was approximately £225 million.

Electra Private Equity has invested £100 million of equity alongside TGI Fridays management team, according to a statement. Debt facilities for the transaction have been provided by ICG and Barclays.

TGI Fridays has 66 UK restaurants, operating from a range of locations, including city centres, shopping centres and leisure parks.

Electra said it will expand the business “further through a mixture of organic growth and new restaurant openings, while at the same time continuing to improve the existing sites.”

“This is the first new investment we have made since announcing a record level of investment for the year to 30 September 2014 and we are delighted to have been able to put more of Electra Private Equity’s cash to work in such a promising opportunity. Our deal flow remains strong and we are confident that 2015 will yield more exciting opportunities,” Alex Fortescue, chief investment partner of Electra Partners, said.

Investments during the period included Hotter Shoes, in which the firm invested £85 million of equity, The Original Bowling Company, which it acquired for £91 million, and Innovia Group, in which Electra invested €40 million as a cornerstone investor.

Electra’s investment in TGI Fridays is the latest example of private equity’s appetite for UK restaurant chains. Earlier this month, Cinven, a pan-European private equity firm, agreed to sell restaurant chains ASK Italian and Zizzi to fellow pan-European firm Bridgepoint for £250 million.

Last month, UK casual dining restaurant chain Prezzo agreed to be taken private by Texas-based firm TPG in a £303.7 million (€389 million, $484 million) transaction, while in July, Cinven sold Pizza Express to Chinese private equity investor Hony Capital.