Blackstone deal shows the value of good management at Tragus

Blackstone's purchase of Café Rouge owner Tragus Holdings for £267m represents a huge endorsement of the restaurant group's management, analysts said this week.

The deal, announced last Friday, also appears to be a great piece of business for Legal & General Ventures, which bought Tragus in January 2005 for just £92m.

Shaun Gomm, manager at Deloitte Corporate Finance, said: "It's a good price but chief executive Graham Turner and his management team are undoubtedly one of the strongest in the sector as a whole at present."

The deal includes working capital of £15m and a borrowing facility of up to £40m to fund growth and potential acquisitions.

With a spate of activity in the causal dining market, such as Yo! Sushi's £35m refinancing and Town Centre Restaurants' £48m secondary buyout backed by Gresham, the City is interested to see what Tragus will do next, according to Gomm.

"Tragus has been bullish about Café Rouge's prospects and with Ortega has set up another platform to roll-out," he said. "However, it will be interesting to see what strategy they adopt, and whether this will mean an acquisition."

Café Rouge owner Tragus Holdings considers £200m stock market floatation >>

By Chris Druce

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