Noodle chain Wagamama is set to launch an aggressive expansion programme after securing £13m from investors.
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Ready to grow (from left): Hutton
Collins director Haseeb Aziz, Ian Neill,
chief executive of Wagamama, and Andy
Gray, partner in Graphite Capital
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The agreement sees long-time backer and major shareholder Graphite Capital realise some of its original investment in a deal that values Wagamama at £63m.
Investment group Hutton Collins, which had been linked with an outright purchase of the company at the start of the year, has injected £17m into the business in exchange for warrants representing a 15% share. Wagamama's management has increased its shareholding in the business by 2% to 15%.
"It's a good deal all round," said Steve Hill, Wagamama's financial director. "We currently generate £8m of cash a year, but with this additional money we can, even conservatively, double the size of the company in the UK within three years."
Wagamama had been tipped to sell to venture capitalists Apax Partners, but announced in August it had pulled out of discussions.
The company has 25 restaurants in the UK with eight franchises worldwide. It plans to open another eight or nine restaurants in the UK before April 2005, and is currently exploring the possibility of rolling out its noodle bars at UK train and airport locations.
Wagamama has just signed its first franchise agreement in New Zealand, in Auckland, and said long-mooted plans to push into the USA were going ahead, with sites in Boston or Chicago as frontrunners.