Restaurant and bar mergers and acquisitions set to rise in 2012

By Peter Ruddick

- Last updated on GMT

Related tags: Private equity, Venture capital

The BDO Restaurant and Bar Report predicts an increase in mergers and acquisitions in 2012
The BDO Restaurant and Bar Report predicts an increase in mergers and acquisitions in 2012
Restaurants and bars in the UK should be prepared for an increase in mergers and acquisitions next year as successful chains look to cash in and buyers prepare for growth in 2013, according to a new report.

The Restaurant and Bars Report by the BDO, the accounting and professional services company, predicts that sales increases will be small in 2012 but private equity firms are likely to acquire restaurants and pubs in preparation for an improvement from the current economic crisis next year.

YO! Sushi, Pizza Express and Jamie Oliver branded restaurants could be among the chains that change hands, BDO claims.

"Food prices are starting to fall and many high street landlords see food and drink businesses as a safer bet than retailers.The good operators are in a great position for when financial pressures start to ease in 2013 and consumers start to feel they have more disposable income. This makes them a very attractive prospect especially if they have a concept that is proven to work outside the capital,” said David Campbell, head of BDOs restaurant and bars team.

Wagamama sale

Earlier this year the private equity group Duke Street acquired the noodle chain restaurant Wagamama from the business owners Lion Capital​. At the time of the sale Duke Street said the potential for further growth in the UK and internationally prompted them to buy.

Pubs in particular

As well as interest from private equity investors, profitable chains looking to cash in as they reach a point in their development when it is natural to sell and banks looking to remove assets are also reasons for the predicted rise in mergers and acquisitions.

One sector in particular that could see a big increase in changes of ownership as a result of banks looking to sell hospitality companies they may have repossessed in the downturn is the pub industry, say BDO.

The BDO Restaurant and Bar Report also predicts for 2012:

  • An increase in calorie and alcohol content information on menus
  • Targeted promotions and marketing using mobile technology
  • More pop-up high street restaurants
  • Free Wi-Fi as standard in restaurants and bars

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