La Tasca secures unique fund deal
By Andrew Sangster
La Tasca, the Spanish tapas bar chain, has secured financing to roll out at least 13 more restaurants within three years, creating 500 jobs.
The concept's founder, Neil Gatt, told Caterer he had already acquired two new sites and had a further three in negotiation to add to the two restaurants already open and trading. The new sites are typically between 2,000 and 2,500sq ft.
A deal worth £7.1m was signed last week and will immediately be drawn upon to develop the two latest restaurants. The first is in Bolton, due to open late next month, and the next is in Chester, scheduled to open in July.
From this North-west base, the group will head south towards Nottingham and on into south-west London. It is expecting to acquire a mix of freeholds and leaseholds, in roughly equal proportion.
The deal heralds a unique financing arrangement which sees corporate advisers taking a more prominent role than is usual in such negotiations and the venture capital backer keeping a lower profile.
"We have taken a trail-blazing approach to venture capital funding. There is none of the old-fashioned fixed exit point," said Mr Gatt. Typically, venture capitalists seek to realise their investment after three to five years.
Through his advisers at accountancy firm Arthur Andersen, Mr Gatt has secured £3.1m of equity funding from venture capital firm 3i, which gives the latter a 40% shareholding. A loan of £4m has also been provided by the Bank of Scotland.
The new approach to funding, known as sponsored private equity, follows the success of the Alternative Investment Market (AIM) which has forced venture capitalists to innovate to compete.
"The financing of this deal is ground-breaking. It has shown that there is a real alternative to AIM and an opportunity for growing businesses to raise finance," said Stuart Lees, Arthur Andersen's corporate finance director in the North.
La Tasca Spanish Bar & Restaurant chain is thought to be the first hospitality business to benefit from this approach to financing.
