Acquisition of restaurant and bar groups by overseas investors to become more common

13 July 2017 by
Acquisition of restaurant and bar groups by overseas investors to become more common

The acquisition of restaurant and bar groups by overseas investors is to become more common thanks to the weakness of the pound.

That's according to the latest BDO Restaurants and Bars report, published this morning.

BDO's director of corporate finance Tom Barnard said there was continued private equity interest in differentiated, scalable restaurant concepts, despite more challenging economic conditions.

And he noted that overseas deals like the acquisition in 2016 of GBK by South African-based Famous Brands for £120m were set to become more common.

Trade acqusitions could provide access to synergy savings and offset increasing cost pressures, as well as delivering the growth that can't be achieved by existing brands as a result of "tapered down" rollout plans, Barnard said.

"There are a number of attractive businesses expected to come to market over the next couple of years. Artisan bakery Gail's and Caribbean eatery Turtle Bay are at the top of the list of stellar concepts being watch carefully. Vietnamese restaurant group Pho is expected to attract a lot of interest should it come to market and Bill's, following a management reshuffle, will likely consider its options at some point."

He also pointed to Chinese brands Hotcha and Zing Zing as ones to watch, as well as predicting more arrivals of brands from the US, following on from the influx of Five Guys and Shake Shack, as well as MOD Pizza and Wingstop. "We wouldn't be surprised to see more follow as UK consumers remain loyal to well-known brands," he added.

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