Boparan Restaurant Group expands its portfolio

CASSANDRA ACQUAH | LEGAL JARGON WRITER Earlier in October, Boparan Restaurant Group expanded its portfolio of restaurants across the UK with their acquisition of Gourmet Burger Kitchen (GBK), buying it out of administration. The move saw Boparan Restaurant Group buy 35 of GBK’s sites and save over 600 jobs. However, 26 sites are due to close meaning over 360 people will be made redundant. Boparan Restaurant Group’s portfolio also includes Slim Chickens, Giraffe and Carluccio’s. They acquired the latter in May 2020 for just £3.4m, making GBK its second acquisition in under six months. GBK was bought by South Africa based company Famous Brands in 2016 for £120m with a vision to grow the business. However, after failing to achieve the returns they set out to achieve, in 2018 it underwent a CVA (Company Voluntary Agreement) resulting in the closure of over 15 sites. The pandemic, which resulted in a national lockdown as well as current local lockdowns, has caused low levels of footfall on high streets and in shopping centres. For this reason, the now ex-owner of Famous Brands withdrew funding for GBK in April, foreshadowing that the future sale of the restaurant chain was also in the works. Famous Brands also owns the Wimpy fast food chain in the UK but it was unaffected by the decision to withhold investment in GBK. Managing director of Boparan Restaurant Group, Satnam Leihal, stated that: “This latest acquisition is in line with our strategy to grow our restaurant group with quality brands. Whilst it is an extremely challenging time for the sector, we believe quality hospitality businesses will recover in the long term as people return to eating out." The acquisition of GBK follows many other changes within the hospitality industry. In July, GBK’s rival Byron was also bought out of administration by investment firm Calveton, whilst in August, Mexican-themed restaurant chain Wahaca announced the closure of 10 of its 28 restaurants and is undergoing a restructuring deal. Legal considerations This M&A activity in the hospitality sector is significant as, despite the downturn businesses are facing, there are still positives with transfers of ownership for quite a few restaurants including GBK, Carluccio’s and Byron. Commercial considerations Since it is a challenging time for the hospitality sector, it is a bold move to invest in it especially in the way Boparan Restaurant Group have. However, this could be an ideal time to take the risk to invest. Since asking prices will most likely be lower, this would be good for the buyer. As limitations on dining inside restaurants are increased, more restaurants’ sites are facing closures, such as Pizza Hut. A month ago, its owner announced the closure of 29 of its UK sites. This acquisition also came soon after Boparan Holdings’ daughter company 2 Sisters Food Group sold part of Fox’s Biscuits in a £246m deal. CASSANDRA ACQUAH Cassandra is an aspiring solicitor with interests in retail and media, as well as the steps being taken to increase diversity at all levels within the legal sector. 👨‍💻Want to share feedback? Did we miss something important? Let us know! We would love to hear from you at info@legaljargon.net or simply just comment below!

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