Equistone takes second bite at Gaucho

The mid-market private equity firm has invested in the Argentine steak restaurant for the second time in a deal reported to value the chain at £100m.

Pan-European mid-market private equity firm Equistone Partners Europe has acquired a majority stake in Gaucho Holdings, which operates Argentine steak restaurant Gaucho and its sister chain CAU, in a deal reported to value the restaurant group at £100 million (€130 million; $142 million).

Gaucho, which offers fine dining with an emphasis on Argentine steaks and wine, operates 14 restaurants in the UK and three internationally in Buenos Aires, Dubai and Hong Kong. Its more low-key sister chain CAU focuses on cuisine from Buenos Aires, and operates 16 restaurants across the UK and one in Amsterdam.

This is not the first time the firm has invested in the restaurant chain. In 2005 Equistone, which was then Barclays Private Equity, acquired 47 percent of Gaucho as part of a £23.5 million management buy-out. The firm sold the company a year later to UK mid-market buyout firm Phoenix Equity Partners for £55 million.

The business was then sold to ICG in 2007, from whom Equistone is acquiring the stake.

Equistone was unavailable for comment at press time.

“[Equistone’s] investment will provide us with the firepower and expertise necessary to expand our restaurant footprint whilst continuing to deliver an outstanding dining experience for our customers,” CEO Zeev Godik, who founded Gaucho in 1976, said in a statement.

Equistone partners Dominic Geer and Joyce Church will join the Gaucho Holdings board as part of the transaction.

The investment is Equistone’s sixth from its fifth buyout fund, which closed in April 2015 on its €2 billion hard-cap after just six months in market. Portfolio companies in the fund include UK Power Reserve, fashion group TriStyle Group, wealth management business Wealth at Work, and metal processing company Rhodius.

The Gaucho acquisition is the latest in a string of restaurant transactions for the UK private equity industry, which include Electra Partners’ investment in TGI Fridays, Bridgepoint’s acquisition of ASK Italian and Zizzi from fellow pan-European firm Cinven, TPG’s take-private of Prezzo, Mayfair Equity Partners’ acquisition of Yo! Sushi, Bowmark Capital’s sale of Las Iguanas to Casual Dining Group, and Cinven’s sale of Pizza Express to Hony Capital.