Wagamama funds expansion plans
Japanese-style noodle bar chain Wagamama turned its back on a flotation today by agreeing a £63m (€93m) refinancing package.
Wagamama, which is controlled by Graphite Capital, said new banking facilities and a cash injection by private investors meant it now had enough funds to pay for its expansion plans.
The chain has built a network of 25 restaurants in the UK and eight overseas franchises from Sydney to Dubai since it was founded in 1992. There is one restaurant in Ireland, on Dublin's South King St.
New openings are planned in the UK – including in airports and train stations where it does not have a presence.
In addition to rolling out more of its overseas franchises, Wagamama has also set its sights on cracking the potentially enormous North American market.
Plans to float Wagamama on the Alternative Investment Market were put on hold in June after Graphite received approaches from venture capital firms.
Graphite considered a trade sale and held detailed talks with private equity group Apax Partners before pulling out of a potential deal at the last minute.
The refinancing package unveiled today will see Graphite lowering its interest in Wagamama from 87% to 70%.
Specialist finance boutique Hutton Collins has made a cash injection of £17m (€25m) for a 12% stake in the company and the Royal Bank of Scotland has provided £47m (€69.4m) in new banking facilities.
Wagamama chief executive Ian Neill and two other executives, who stood to receive a sizeable windfall had the company been sold, have increased their stake slightly to 15%.
Mr Neill said: “We have proved the (Wagamama) concept works and we have a coherent strategy for growth.”
The refinancing of Wagamama is the second major transaction completed by Graphite Capital in the last four days and marks a five-fold return on its original investment in 1996.
On Friday, Graphite celebrated the sale of electronics retailer Maplin to private equity firm Montagu for £244m (€360m).
