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Wed 5th Apr 2023 - Fulham Shore to be acquired in c£93m deal by global food company Toridoll |
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Fulham Shore to be acquired in c£93m deal by Japanese investment firm Toridoll: Fulham, Shore, the Franco Manca and The Real Greek operator, has announced it has received a recommended cash offer by Great Sea Kitchens Limited, a newly-incorporated company established on behalf of Toridoll Holdings Corporation, which values the business at £93.4m. Toridoll, which is a global food company listed on the Tokyo Stock Exchange with circa £1bn consolidated net sales and a current market capitalisation of approximately £1.5bn, has set up a new company called Bidco to oversee the acquisition of the 97-strong Fulham Shore. Founded in 1990 by Takaya Awata, Toridoll, which is partnering with restaurant sector specialist fund Capdesia on the acquisition, aims to have over 5,500 stores worldwide with increasingly balanced growth across diverse group brands both in Japan and overseas. Its current European brands include Marugame Udon, Shoryu and Wok to Walk. It said: “The board of Bidco and the independent Fulham Shore directors are pleased to announce that they have reached agreement on the terms of a recommended all cash offer pursuant to which Bidco, a newly-incorporated company established on behalf of Toridoll Holdings Corporation will acquire the entire issued and to be issued share capital of Fulham Shore. Under the terms of the acquisition, Fulham Shore shareholders will be entitled to receive: 14.15 pence in cash for each Fulham Shore share held. The acquisition values the entire issued and to be issued ordinary share capital of Fulham Shore at approximately £93.4m on a fully diluted basis. The acquisition price of 14.15p for each Fulham Shore share represents a premium of approximately: 34.8%. to the closing price of 10.50p per Fulham Shore share on 4 April 2023 being the last Business Day before the date of this announcement. Bidco believes that Fulham Shore’s restaurants offer a leading customer proposition – providing authentic, high-quality food and drinks at affordable prices. In spite of the challenging trading circumstances of recent years, Fulham Shore has continued to deliver robust performance overseen by its highly experienced management team. Bidco believes that Fulham Shore is well positioned to continue to benefit from favourable market trends, particularly an anticipated growth in demand for Italian cuisine, and that its differentiated operating model will put Fulham Shore at the forefront of that growth. Bidco also recognises the significant opportunity for Fulham Shore to expand its presence in the UK (where Fulham Shore’s 97 sites reflect an under penetration compared to peers), internationally (where Bidco believes the strength of Fulham Shore’s brands and product offering will resonate well) and through retail channels (where Franco Manca’s nascent offering of cook-at-home pizzas is demonstrating encouraging progress). Bidco believes that, alongside the wider TORIDOLL group and Capdesia Group Limited, it is the right partner to help Fulham Shore deliver on that growth opportunity – bringing a unique combination of expertise, industry knowledge and a demonstrable track record of growing restaurant brands that will support Fulham Shore’s management team as they implement the business’ expansion strategy.” The Independent Fulham Shore directors intend to recommend unanimously that Fulham Shore shareholders approve the acquisition. David Page, executive chairman of Fulham Shore, said: “We are proud of the significant progress that Fulham Shore has made since it was founded in 2012. We are proud of our two brands, Franco Manca and The Real Greek, and the growth we have delivered for Fulham Shore. Whilst we remain excited about the prospects for the business on a standalone basis, we have been in discussions with both Toridoll and Capdesia and received a proposal that we believe is compelling for all of our stakeholders. We believe Toridoll and Capdesia’s experience in successfully building restaurant businesses and their long-term vision for Fulham Shore, will enable Fulham Shore to fulfil its long-term potential. Having carefully considered the range of options available to Fulham Shore, including the terms of the proposed acquisition, the Independent Fulham Shore directors have concluded that the acquisition, which offers certainty of cash value to Fulham Shore shareholders, is in the best interests of Fulham Shore, its shareholders and wider stakeholders, and as such are unanimously recommending the acquisition to shareholders.” Takaya Awata, President and chief executive of Toridoll, said: “Fulham Shore has two exciting and fast growing brands that are aligned with Toridoll’s slogan of ‘Filling Our Planet with Dining Experiences that will Move You’. We are confident that both have the potential for significant future growth, domestically and internationally. Together with the strength of these brands and our partnership with restaurant sector specialist fund Capdesia, we have the opportunity to leverage our combined expertise and significant resources to accelerate their growth even further. We look forward to working closely with Fulham Shore’s management and employees as we embark on the next stage of the company’s growth.” The proposed acquisition comes as Fulham Shore said that during the second half of FY23, both its Franco Manca and The Real Greek businesses “delivered creditable underlying performances despite the impact of industrial action, social disruption, and cost of living increases for our customers”. It said: “In addition, the hybrid partial working from home ‘new normal’ continues to change the trading patterns in the group’s restaurants. In general, transport hub and tourist locations are performing strongly while restaurants near offices have not yet fully returned to pre-pandemic trading levels.” The group opened 18 new restaurants in FY23, including one relocation. During this period there were two restaurant closures. These openings were primarily funded through operational cashflow during the financial year. New openings comprised of 13 Franco Manca pizzeria including sites in Cardiff, Windsor and three in the Manchester area, as well as five new The Real Greek restaurants including St James Quarter in Edinburgh and the Silverburn shopping centre Glasgow. The new locations have all been “well received”, with Cardiff and Edinburgh being “especially busy since opening”. The company said: “The trading momentum and absence of covid closure periods compared to the last two financial years as well as new store expansion has driven a significant increase in revenue to circa £100m for FY23, which represents a new record high for the group. As flagged at the half year, input costs rose throughout the year due to inflation in cost of raw materials and utilities, however there are early signs of inflation in these areas easing. In line with Fulham Shore’s international strategy during the year we franchised Franco Manca in Athens, Greece and after the year end, later this week, we will open a franchised Franco Manca in Malaga, Spain, our second international territory. The launch in November 2022 of our range of five Franco Manca Cook at Home pizzas in the UK’s largest supermarket business has been well received with an encouraging sales performance so far. In addition, the Real Greek has entered a collaboration for its first retail product, a herb and spice mix, which is due to be introduced into UK supermarkets this summer. We now trade from 27 The Real Greek restaurants and 70 Franco Manca pizzeria throughout the UK. Despite the slowing down of the group’s 2023/2024 opening programme to reflect the current short-term uncertainties, the group continues to seek desirable sites at favourable rents and several locations are under negotiation. The outlook for costs, be they utilities, raw ingredients or labour continue to present challenges for all operators within the sector and we are not immune. As with other operators, finding staff remains challenging. As customer numbers and demand continues to recover the group currently plans to open around six new UK restaurants across both brands in the financial year ending March 2024 and will review this opening programme in October 2023 at the half year.”
One day to go before next edition of The New Openings Database release, to show details on 110 new sites, 5,000-word report included: The next edition of The New Openings Database will show the details of 110 newly announced site openings and upcoming launches for Premium subscribers when it is published tomorrow (Thursday, 6 April), at midday, including which company has opened a site or its plans to open one in the future. It will have details on what type of site it is and its location, and there will also be a website link to the businesses. The database is published on a monthly basis, and the next edition features growing restaurant and bakery brands, niche cuisine, and expanding experiential concepts. Premium subscribers will also receive a 5,000-word report on the new additions to the database. Premium subscribers also receive access to four other databases: the Propel Multi-Site Database, produced in association with Virgate; the Propel Turnover & Profits Blue Book; the UK Food and Beverage Franchisor Database; and the Who’s Who of UK Food and Beverage. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email jo.charity@propelinfo.com to upgrade your subscription. Premium subscribers are also to be given exclusive access to the recording and slides to Propel Multi-Club Conferences. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before; regular video content and regular exclusive columns from Propel group editor Mark Wingett.
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