Hony Capital acquires PizzaExpress
Hony, which manages a fund totalling c£4.1bn, is believed to have held off competition from Fosun, the Chinese conglomerate; Citic Capital Partners, another major Beijing-based fund; and American buyout group TPG, to secure the Richard Hodgson-led, c504-strong business.
The successful deal values PizzaExpress, which reported EBITDA of £88.5m in its latest financial year, at a multiple of around 10 times.
'Considerable interest'
Gondola chief executive Harvey Smyth said that the company had received “considerable interest” in the business during the sale process.
In a joint statement Gondola and Hony said: “This transaction is the largest in the European restaurant sector in the past five years. Under Gondola’s ownership, PizzaExpress has built a strong management team, led by Richard Hodgson, which will remain with the business.”
John Zhao, chief executive of Hony, said: “With PizzaExpress, we have the opportunity to leverage our local expertise to accelerate its growth in the Chinese market, as well as to continue to drive its business forward in the UK.”
Smyth said: “PizzaExpress is an iconic brand in the UK restaurant sector with a strong and growing international presence. This has been reflected in the considerable interest we received in buying the business and in today’s transaction with Hony. PizzaExpress is stronger than ever and great credit for this goes to the teams there, who leave Gondola with our thanks and best wishes for the future.”
'Exciting time'
Hodgson, chief executive of PizzaExpress, said: “Today’s acquisition of PizzaExpress by Hony is a very positive development at an exciting time for the business. Asia is a key part of our future growth strategy and Hony’s expertise in this region will be invaluable. We are looking forward to working with them on this as well as our ambitious UK growth plans.”
Since the business was taken private seven years ago, Gondola has added over 130 PizzaExpress restaurants in the UK and created around 2,500 jobs.
Gondola re-acquired the PizzaExpress international brand rights in 2010 and PizzaExpress has subsequently developed strong platforms in a number of regions from which to accelerate its expansion. Over the last seven years, EBITDA has grown through the recession from c£60m to c£90m.
Chinese expansion
Earlier this summer, Gondola-owned chain opened its 500th site in total and its first full-owned international site in Beijing, China.
It is thought that the group believes it can open an initial 25 company-owned sites in the region and has put together a management team to oversee that development.
The company now has 22 sites in China – including Shanghai and Hong Kong. At present three of top 20 PizzaExpress restaurants in the world are based in China.
Cinven, which acquired Gondola in September 2006 for £900m, appointed Rothschild and Goldman Sachs to explore a potential float of Gondola or a break-up of the business earlier this year.
It appointed Goldman Sachs to handle a sale of its biggest brand, while Rothschild was appointed to find a buyer for the combined Ask and Zizzi businesses, which comprises c250 restaurants.
Last year, Gondola sold Byron, the better burger chain, to Hutton Collins for £100m.
This story was first published in M&C Report. To subscribe please contact rzvyl.pebsg@jeoz.pbz or call 01293 846 578.
