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Morning Briefing for pub, restaurant and food wervice operators

Mon 19th Jun 2023 - Exclusive: private equity firm LDC exits D&D London, business seeks further investment
Exclusive – private equity firm LDC exits D&D London, business seeks further investment: Private equity LDC has exited its investment in restaurant operator D&D London after a decade of supporting the company, which owns and operates circa 40 restaurants across the UK and internationally, Propel has learned. In April 2013, LDC bought a majority share in D&D London, which at that point owned more than 30 restaurants in London, Leeds, Paris, New York, Istanbul and Tokyo. The deal, which was thought to be worth £50m, saw LDC buyout vendors Conran Holdings and private equity investors Caird Capital, with D&D's then senior management team led by Des Gunewardena and David Loewi retaining their investment in the business. Propel understands that LDC, which had been looking at its options for the restaurant business on and off over the past 18 months, has transferred shareholder control in D&D to Beechbrook Capital. Beechbrook has been “committed investors” in D&D since 2017 when it provided a mezzanine loan to part-refinance LDC’s and the management’s shareholder loans. Interpath, which had previously been advising the business, has now been reappointed to sound out the market as D&D seeks further investment to support its transformation plan. Loewi, chief executive of D&D, told Propel: “We have recently received short-term funding from our lenders to continue with our transformation plan. However, to complete the plan and invest in growth opportunities we require further long-term financial support. Beechbrook are aligned with management and remain committed to the business. However, we want to understand what external opportunities exist for raising more finance. To this end, we have appointed Interpath Advisory's Corporate Finance practice to sound out the market to seek further investment to support our plan. We see this as a highly positive move to support the business, investing further in our sites and looking for further investment opportunities to grow the business. The UK hospitality business has been through a tough period with continuing industrial action, the wettest spring in 40 years according to the BBC, food, drink and utility inflation, and the Ukraine war, but we have also seen as soon as the sun shines a 30% turnover upside in our numbers, with our terraces packed, exceeding our forecasts. So, we are very optimistic about the future.” Earlier this year, D&D London ceased trading four of its UK-based sites – East 59th (Leeds), Klosterhaus (Bristol), Avenue and Radici (London). Klosterhaus, East 59th and Avenue were included in the seven sites Propel revealed that D&D London had placed on the market last November. The other sites being offered for sale included 100 Wardour Street, Cantina and the Blueprint Café, which are both based in Butlers Wharf, and Issho in the Victoria Gate scheme in Leeds. In September, the business appointed its co-founder, chief operating officer and deputy chairman Loewi as interim chief executive, after Gunewardena left the company to pursue other ventures. D&D London features in the Propel Turnover & Profits Blue Book. Group revenue over the 15 months to June 2022 was £163m, or 90% of pre-covid levels, while earnings were £17m, or 122% of pre-covid. The Blue Book ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. 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 to upgrade your subscription.

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