HUGH Osmond, the entrepreneur behind Pizza Express, Punch Taverns and the insurance group Pearl, has bought the Strada chain of Italian restaurants in a £37m deal.
Sun Capital Partners, Osmond’s private equity vehicle, is buying the Strada brand and 43 restaurants from the Tragus Group in a deal announced yesterday.
Osmond said his plan for Strada involves expanding the number of restaurants in the group as well as transforming Strada from a restaurant into an all-day cafe for customers.
“The market has polarised and people go to restaurants to eat and go to Starbucks or Costa to have coffee. That seems wrong to me, and if we get the restaurants right Strada has absolutely brilliant spaces in brilliant locations on great high streets... these should be places people go to hang out, have a coffee, use the wifi and have their lunch or dinner, but more than anything to feel comfortable in,” Osmond told City A.M.
“For us, [Strada] will be a story of investment and expansion. The menu will be seriously updated.
“The quality of ingredients and food will be dramatically improved. And there will be a major investment in the premises, giving a very different ambience,” he said.
Osmond has been looking at getting back into the high street restaurants market, but it was not until Strada became available that he saw the right portfolio of locations come up.
“We’ve been out of restaurants and pubs for quite a long time now... which was a nice break, but I like restaurants and bars probably more than any other business. The last two or three years we’ve been catching up with what’s been happening in that world and we’ve been planning to get back in. [Strada] is a fantastic group of restaurants, and we have big plans to invest in the business and expand it. Our focus is on creating places where people want to hang out and eat fabulous Italian food, including fresh, healthy and up-to-date menu options,” he added.
“This is all about breathing new life into a great business.”
Strada’s existing management team will continue to operate the business and Sun Capital will look to recruit more staff as it expands the size of the restaurant’s estate. The deal leaves Tragus with around 200 restaurants spread across its Cafe Rouge and Bella Italia chains.
PROFILE: HUGH OSMOND
Hugh Osmond bought Pizza Express for £18m in 1993, together with university friend and business partner Luke Johnson, and oversaw its flotation and expansion to 367 restaurants.
During his time there he turned annual losses of £500,000 into profits of £38m.
After Pizza Express, Osmond co-founded pub group Punch Taverns and life assurance vehicle Pearl, later known as The Phoenix Group, which is currently listed on the FTSE 250.
As executive chairman of Punch Taverns, he orchestrated the acquisition and integration of a number of pub estates including the Allied Domecq Retail estate, the Bass lease estate and Inn Business, as well as the disposal of 550 pubs to Bass.
Punch floated in 2002 with a market valuation reaching £3.5bn.
Pearl was acquired for £1.1bn in 2009 by Liberty Acquisition Holdings, an investment vehicle controlled by billionaire Nicolas Berggruen.
His latest venture with Strada was once owned by Johnson, Osmond’s business partner.
Johnson sold the brand and estate in 2005 for £57m to Richard Caring, the leisure entrepreneur, who 18 months later sold it to Tragus, then owned by Blackstone, in a £140m deal.