Urban Dining buys Tootsies for £31m
Urban Dining, the company set up earlier this year by two former directors of PizzaExpress, has bought burger chain Tootsies for more than £31m.
Glen Tomlinson and John Metcalf set up the firm in May with the aim of buying up several restaurant chains with a minimum of 15 sites and expanding them across the country.
It has paid £30.58m in cash plus 1.16 million shares for Tootsies, which currently has 23 restaurants.
The new owners want to expand the chain to about 100 restaurants.
To help fund the acquisition, Urban Dining has raised £27.9m through a placing of new shares with institutional investors.
Tootsies is a full-service, "value-for-money" chain, with an average spend per head of about £12.
It is based around "quality" burgers and aims to appeal to families in particular.
The restaurants are sited on high streets and in shopping centres.
A 24th site is due to open in October, contracts have been exchanged on three new sites and a further seven are under negotiation.
Of the current restaurants, 19 are branded as Tootsies and four as Dexter's. The new owners intend to rebrand the Dexter's outlets as Tootsies.
The first Tootsies opened in the early 1970s in Notting Hill, west London.
In 1999, when it had reached nine restaurants, the chain was sold to Andrew Bonnell, with backing from two venture capital firms.
Bonnell, managing director, will join the board of Urban Dining on completion of the acquisition. He has made an estimated £1.2m out of the deal.
Metcalf said: "This deal marks the first of the acquisitions we promised when we launched Urban Dining on the stock market in May this year.
"We intend to use the cash generated by the business, together with our expertise, to accelerate the roll-out of the Tootsies format.
"We are also actively pursuing our next acquisition."
The company intends to buy one or two further established restaurant chains, then centralise their support functions.
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