Lion Capital has bought a majority stake in café-bar chain Loungers in a transaction that values the business at £137m.
The business acquired the share through the acquisition of private equity firm Piper’s stake in the company and a portion of the founders’ stake.
Loungers was founded in Bristol in 2002 by a trio of friends, Alex Reilley, Jake Bishop and Dave Reid, and the company now has 94 sites under the Lounge and Cosy Club brands.
Piper invested in Loungers in April 2012 when the business comprised 20 Lounges and three Cosy Club sites across the UK. The business has opened 20 sites a year since 2014 and aims to open its 100th site by April 2017 with a further 20 in the pipeline for the following year.
The team behind the business will continue their involvement for the next stage of its growth. Reilley will stay on as chairman of the group. Nick Collins, who joined as finance director in 2012 and became CEO in 2015, will continue to lead the business together with Justin Carter who joined as COO in 2015. Bishop will remain as managing director of Cosy Club.
James Cocker, partner, Lion Capital said: “We have admired Loungers for several years as one of the most distinctive and scalable foodservice propositions in the UK. Its casual, all-day offering is well-aligned with consumer trends and has been proven to trade successfully in an extraordinarily diverse range of locations. Alex, Jake, Nick and their team have built a first-class business with a wonderful culture. We are tremendously excited to partner with them for the next phase of the company’s development.”
Chris Curry, managing partner, Piper said: “When we invested in the business we believed Loungers had the potential to fill the gap between pubs and coffee shops and we are proud to have proven that to be the case. There remains enormous scope for growth, with over 500 sites identified in the UK for the Lounge brand alone.”
Reilley, co-founder and chairman, Loungers said: “The Piper team have been absolutely brilliant for Loungers and we’ve enjoyed a wonderful and productive partnership with them over the last five years. It has been a real pleasure and a lot of fun sharing Loungers with Piper, who exit with the business in a truly excellent place. From these strong foundations we look forward to the next phase of growth with Lion Capital, who share our excitement and passion about the future and have the experience to help us continue fulfilling our potential. We have known the Lion team for some time, and their experience in working with Wagamama and other companies in the leisure, food and retail sector will be a huge benefit as we enter the next phase of our expansion.”