Hony Capital buys PizzaExpress
Hony Capital acquired the restaurant chain after bidding successfully in an auction process that attracted investment firms Citic Group, Advent International, The Carlyle Group and former owner TDR Capital.
The Chinese firm paid ten times PizzaExpress’ £88.5 million of EBITDA (earnings before interest, tax, depreciation and amortization).
With twelve restaurants in Hong Kong and nine in Shanghai, Richard Hodgson, Chief executive of PizzaExpress, said expanding into the Asian market is a key part of the company’s growth strategy. He described the acquisition by Hony Capital as a “very positive development at an exciting time for the business.”
UK and China expansion planned
Earlier this year a PizzaExpress restaurant was opened in Beijing, China’s capital city.
Hony Capital says it plans to expand the PizzaExpress brand both in China and the UK.
In a joint statement, Hony and Gondola announced:
“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.”
Cinven Ltd. acquired the Gondola Group in 2006 for £1.34 billion. It sold Byron, its burger chain, to Hutton Collins Partners LLP for £100 million in October 2013.
According to rumors in UK and US media, Gondola plans to sell off its remaining assets, including ASK Italian and Zizzi.
More Chinese equity firms investing overseas
Hony Capital Ltd. was founded in 2003 and is sponsored by Legends Holdings Corporation, a major private equity firm in China. It manages approximately $7 billions’ worth of assets. It is one of several Chinese private-equity companies that have been increasingly investing abroad.
Hony’s purchase follows several cases of Chinese firms investing in UK food brands. In May, Bright Foods bought a controlling stake (60%) in Northamptonshire-based Weetabix, which owns the breakfast cereal brand as well as Ready Brek and Alpen. The investment valued the company at £1.2 billion.
Several other UK restaurant groups have been put up for sale, including Strada, Las Iguanas and Yo!Sushi.
Hony plans to expand the PizzaExpress brand in the UK and China.
The PizzaExpress chain has 436 restaurants in the United Kingdom, and another 68 overseas in Europe, Hong Kong, mainland China, and the Middle East.
The business was founded in 1965 by Peter Boizot. It was first floated on the London Stock Exchange in 1993 with franchises opening across the United Kingdom, and has since then belonged to several private equity groups.
In 1996, all the UK franchises were bought back. In 2003, TDR Capital and Capricorn Associates bought the company and turned it private. It was floated again in the London Stock Exchange in 2005. It was then bought by Gondola Holdings, which was later acquired by Cinven Ltd. in 2007.