Wagamama owner acquires Mexican restaurant brand Barburrito in £7m swoop
The owner of Wagamama restaurants has acquired Mexican fast-casual restaurant brand Barburrito for £7m.
Announcing the takeover on Tuesday morning, the Restaurant Group said the purchase represented a next 12 months run-rate EBITDA multiple of 4.4x.
The London-listed group said Barburrito’s offering was “well aligned with key consumer trends including healthy eating, convenience, customisable cuisine,” with customers offered competitive prices.
The Barburrito brand “offers high quality products at attractive prices with an average spend per customer of c.£10.”
The Mexican chain’s profit before tax was £1.7m for the period ended 26 September 2021, with gross assets totalling £3.9m.
The business and its 16 existing sires will be acquired from existing shareholders
Barburrito restaurants are expected to contribute adjusted company level EBITDA and profit before tax of c.£1.6m and c.£0.8m respectively to TRG over the next 12 months.
A note from Investec said the acquisition and its plans for debt repayment and interest rate caps, were both “testament to the company’s ability to buy assets in depressed markets while minimizing interest costs in a rising rate environment.”
“There are still uncertainties ahead for the eating-out space, but we see RTN as the stock to own,” the note added.