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Penta invests in UK restaurants

The middle market private equity house is backing the MBI of Out of Town Restaurants, with plans for organic growth and add-on acquisitions.

Penta Capital, the Glasgow-based private equity house, is backing former Old English Inn chief executive Colin Mayes in the management buyin of UK food court operator Out of Town Restaurant Group.

Terms of the deal have not been disclosed, although Penta is thought to be providing around 40 per cent of the funding in equity, with Barclays Bank arranging debt to cover the balance.

Out of Town trades in shopping centres and leisure venues including locations such as Meadowhall, Trafford Centre and Bluewater. In the past financial year the group had turnover of approximately £26m.

Penta Capital became aware of the deal in September after James Holner, chief executive of the Restaurant People Group, which acquired Las Tasca in 2001, introduced Armour and his team to the firm. Out of Town chairman Lawrence Wosskow decided to sell the Rotherham-based firm, which he founded in 1998, in an effort to focus on existing retail initiatives.

“Lawrence Wosskow got into this business by accident. He’s a retailer by instinct and he has decided to hand over the business to people with professional experience. It is a time thing,” said Craig Armour, director at Penta Capital.

Commenting on Penta’s plans for the business going forward, Armour said: “The idea is to grow the company organically through setting up new units. We also plan to make some small acquisitions in due course.”

Wosskow is leaving the business and will be replaced as chairman by Mayes. Existing managing director Simon Heath will remain in place. Horler has been appointed a non-executive director.

Penta Capital has funds under management totaling around £150m. Penta Fund I invests in all types of later stage private equity transactions, including MBOs, MBIs, platform investments and development capital.  Pentech Ventures is an early stage software fund. To date the firm has committed over £50m in seven investments.