The noodle chain Wagamama has been bought by the owner of the Garfunkel’s and Frankie and Benny’s restaurant chains for £357m in cash.
The deal marks a shift for Restaurant Group, most of whose restaurants and gastropubs focus on US, TexMex and traditional British cuisine, and is expected to generate cost synergies of about £22m.
Restaurant Group, which also owns the Chiquito chain, will launch a £315m rights issue to fund the deal, which it expects to be earnings enhancing in the first full year and accretive thereafter.
The company said the deal had an enterprise value of £559m, and included 138 directly operated Wagamama restaurants in the UK and the US as well as 58 franchised restaurants in Europe, the Middle East and New Zealand.
Wagamama began in 1992 in Bloomsbury, central London, by Alan Yau, who subsequently created the Michelin-starred Chinese restaurants Hakkasan and Yauatcha. It has expanded steadily to a national presence since, becoming a familiar feature on British high streets.
The deal will be funded through a combination of cash, debt and the rights issue.
Wagamama’s current owner, the private equity firm Duke Street Capital, bought the chain in 2011 for a reported £215m.
