Risk Capital to float London cake maker

The Luke Johnson-backed business plans to raise £33m with a listing on the AIM in London.

Risk Capital Partners will take London-based café chain and cake maker Patisserie Valerie public on the AIM, London’s junior stock market, according to a statement.

Patisserie Holdings, which makes premium cakes, pastries, snacks, meals and hot and cold drinks across five differentiated brands including Patisserie Valerie, hopes to raise approximately £33 million (€40 million, $55 million) in the public offering.

The net proceeds will primarily be used to repay all of the group's existing outstanding senior debt of approximately £22 million and shareholder loans of approximately £11 million.

The first Patisserie Valerie café was opened on Frith Street in London's Soho district in 1926 by Belgian-born Madame Valerie, whose goal was to introduce continental patisserie products to the UK.

Risk Capital, the firm co-founded by entrepreneur Luke Johnson, acquired a majority stake in the business in 2006. Risk’s management team expects to continue to hold a majority stake after the IPO, it said in the statement.

Under Risk Capital’s ownership, Patisserie Holdings has completed four add-on acquisitions: sandwich and salad retailer Philpotts; Druckers, a patisserie chain with cafes across the Midlands and North West of England; Baker & Spice, a deli/bakery concept with four prime central London sites to the business; and bakery site Flour Power City Bakery. Since 2006, Patisserie has grown from eight stores to over 130, delivering seven years of uninterrupted increases in revenue and EBITDA, according to Risk.

Risk Capital is currently investing RCP II, a £75 million fund. The firm, which was founded in 2001, typically invests £3 million to £15 million of equity in established, profitable companies based in the UK. Fund II is currently two-third invested, following last year’s investment in UK holiday business Neilson. One more investment would take the fund up to the 75 percent mark, Johnson told Private Equity International last December.