Palatine has taken a 65% stake in the nine-strong business for an undisclosed sum, with the rest held by the management team that includes Bacon as non-executive chairman and Sue Crimes as managing director. Gusto operations director Tony Griffin is also joining the board, along with Palatine managing partner Gary Tipper and investment director Beth Houghton, who led the investment process.
Gusto currently operates across nine sites in the north including, Alderley Edge, Cookridge, Cheadle Hulme, Didsbury, Edinburgh, Heswall, Knutsford, Liverpool and Newcastle. It has plans to launch a new flagship restaurant in Manchester city centre.
Regarding further expansion, Bacon told M&C Report: “We’re looking at Glasgow, we’re looking at Chester, we’ll be looking at the M25 and London quite early on in the process. We’ve got a good site in Birmingham earmarked as well.
“We’re looking at four in the first year, then up to five for a couple [of years], getting us to about 25-26 units over four/four and a half years.”
Debt funding for the expansion is being provided by Barclays and Beechbrook Capital. “We are comfortable that we have enough funding in place to do 25-26 units,” Bacon said.
The Restaurant Group’s minority stake in the business has been bought out as part of the deal.
Bacon said: “It will be great to see what has been a very successful brand in the north west finally get its wings and fly. Jeremy [Roberts, Living Ventures commercial director] and I are very excited to be working with Sue, Gary and the team to take Gusto to a national audience.”
Crimes said: “This is a very exciting time for myself and the Gusto team. I am delighted that a partnership with Palatine has been formed and that together we will grow Gusto into a larger national business. Gusto is already a successful brand but I believe this deal will see it become a recognised brand throughout the country.”
Tipper said: “We have been talking to the Living Ventures team for a number of years and we are delighted to be supporting them in this expansion of Gusto. The Gusto team have done an excellent job to date and we look forward to introducing the brand to other parts of the UK”.
Deloitte advised on the Gusto deal.
This year, Gusto achieved sales of £16.4m and currently employs more than 400 staff across the various locations.