Barburrito acquired by The Restaurant Group at 4x profits

Fast-casual Mexican restaurant chain Barburrito has been acquired by The Restaurant Group (TRG) in a £7 million deal. The price represents slightly over a 4x multiple of the Manchester-based chain’s pre-tax profits of £1.72 million for the year ending September 26 2021, generated on turnover of £11.1 million.

Barburrito was founded in 2005 and has 16 restaurants, largely situated in city centres, shopping centres and transport hubs. Post-acquisition, TRG aims to double this number over the next four years as the initial stage of an expansion plan. The group says that there is “significant scope” to develop and expand the chain, particularly in the south of England, where it has limited coverage.

TRG adds that Barburrito is “well aligned with consumer trends including healthy eating, convenience and customisable cuisine.” The chain will be integrated into the group's Leisure & Concessions division and is expected to contribute adjusted EBITDA of around £1.6 million over the next year.

Like many smaller and mid-sized fast-casual chains, Barburrito struggled with enforced closures during COVID-19 lockdowns and lower overall footfall during the pandemic. In December 2020, the business was acquired out of administration in a deal that saved more than 270 jobs.

Following its latest acquisition, the company joins one of the UK’s largest restaurant groups. TRG boasts a diverse portfolio of some of the UK’s best-known restaurant operators, including Chiquito, Wagamama and Frankie & Benny’s, and operates around 400 restaurants across the UK.

The acquisition follows a strategic review by TRG, managed by finnCap Cavendish and law firm TLT. TLT partner Richard Life commented: “This deal reflects positive change for the sector after a period of economic uncertainty over the past few years. We are delighted to have been involved in the growth plans of a national award-winning business as they continue to strengthen their position in the UK.”

Barburrito founder Morgan Davies added: “TRG are a great operator who we know well, with the firepower to continue to support Barburrito’s growth and development. This transaction will allow the business to move to the next stage of its growth within TRG’s strong brand and site portfolio.”


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