A year and a half after announcing a strategic review of its leisure business, The Restaurant Group plc (TRG) has announced that it has agreed to sell its Frankie & Benny’s and Chiquito brands to Big Table Group (BTG) for a combined £8.5 million. The sale forms part of TRG’s plan to focus on its core Wagamama, Brunning & Price, and concessions business.
The deal will see BTG acquire 75 sites primarily under the Frankie & Benny’s and Chiquito brands, as well as some other existing sites. A nominal fee of £1 has been agreed to be paid by BTG for the estate, while TRG will make a cash contribution of £7.5 million to Big Table, subject to certain cash, debt and working capital adjustments. The transaction is expected to complete during early Q4 2023.
Big Table Group CEO, Alan Morgan, expressed his delight with the acquisition, saying: “Creating, developing and acquiring brands that complement our existing portfolio whilst offering widespread consumer appeal is a fundamental part of our growth strategy. This exciting acquisition forms part of that strategy and we are delighted to be welcoming this new team into The Big Table Group.”
TRG hopes that the sale of its leasehold estate will significantly accelerate its core strategic goals of adjusted EBITDA margin accretion and deleveraging. This forms part of the company’s medium-term plan to restore profits following a ‘significant deterioration’ in its EBITDA margin.
TRG reported strong like-for-like (LFL) sales growth for the first half of the year (H1), with group revenue up 10% and adjusted EBITDA up by 15%. Its leisure estate trading, however, was below the market, with year-to-date LFL sales decline of 3%.
TRG CEO, Andy Hornby, said: “A sale of our leisure business significantly accelerates our medium-term strategic plans to increase adjusted EBITDA margins and reduce leverage. On behalf of TRG, I would like to express our massive thanks to the extraordinarily hardworking and dedicated teams across the leisure business who have made huge improvements in the customer proposition over the last few years. We wish them all well as part of the Big Table Group.”
By selling Frankie & Benny’s and Chiquito, TRG is a step closer to its goal of creating a high-quality retained group consisting of its Wagamama division; its pubs estate, which comprises the Brunning & Price brand; and its airport-based concessions business. With all three divisions posting a LFL sales rise in TRG’s H1 results, it looks as though the deal could be beneficial for its future