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Wagamama ‘up for sale'

02 August 2010 by

The private equity firm that owns Wagamama ]( looking at putting the business up for sale for up to £250m, according to reports.

Lion Capital is understood to be taking another look at selling the company after cancelling a flotation on the stock market three years ago as the credit crunch worsened, according to the Sunday Times.

Wagamama has grown to 66 outlets in Britain and 39 restaurants in Europe, the Middle East and Africa, having been founded by Alan Yau in 1991. In the year to 24 April 2010 it saw revenues climb 8.6% to £109m, up from £100.9m in the previous year. Earnings before interest tax depreciation and amortisation (EBITDA) rose 22% to £20.9m.

Meanwhile, the business has opened six restaurants so far this year, as well as launching a range of take-home products. The company said that a new staff incentive scheme also helped it increase its EBITDA margin from 16.9% to 19%.

Lion bought a majority stake in the business for £103m in 2005, after Yau sold out to Graphite Capital 1998.

However a spokesman for Wagamama declined to confirm whether or not Lion was now itself in discussions to sell its holding: "They are a private equity-backed business and as such they are always up for sale because private equity-backed businesses have to get a return," the spokesman said.

The restaurant chain is thought to be an attractive proposition for another private equity-backed business.

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By Neil Gerrard

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