April 17th, 2014

Living Ventures sells Gusto to private equity

Living Ventures sells Gusto to private equity

By Peach Report

Living Ventures has sold a majority stake in its Gusto restaurant chain to Palatine Private Equity. New financing will see the brand grow from nine to 25 sites. The deal will also see The Restaurant Group dispose of part of its interest in the LV group.

Palatine will take a 65% holding in the Knutsford-based restaurant brand, which was founded in 2007 following a rebrand from Est Est Est.

LV founders Tim Bacon and Jeremy Roberts have invested in the new Gusto business and will stay on as non-executive directors, Bacon as chairman. Gusto managing director Sue Crimes and operations director Tony Griffin will join the board, with Palatine's managing partner Gary Tipper and investment director Beth Houghton.

The Restaurant Group which had an interest in LV through the original sale of Est Est Est will receive £7m of cash proceeds from its stake disposal. TRG's only remaining interest in LV will be a £4m loan note in the Blackhouse Grill business - which LV will now also look to develop.

The Gusto disposal by LV is part of an established strategy to spin-off parts of its business to management and outside investors, and follows a similar deal that brought in private equity to fund the growth of its New World Trading pub business - although this is the first time it has given over majority control.

Gusto currently operates across nine sites in the North including, Alderley Edge, Cookridge, Cheadle Hulme, Didsbury, Edinburgh, Heswall, Knutsford, Liverpool and Newcastle. This year, the business achieved sales of £16.4m and currently employs more than 400 staff across the various locations.

With Palatine's support, it has a three to four year growth plan, including the launch a new flagship restaurant in Manchester city centre. Further restaurants will be opened across the UK focusing on city centre and affluent suburban locations.

Tim Bacon said: "It will be great to see what has been a very successful brand in the North West finally get its wings and fly. Jeremy and I are very excited to be working with Sue, Gary and the team to take Gusto to a national audience."

Sue Crimes said: "This is a very exciting time for myself and the Gusto team. I am delighted that a partnership with Palatine has been formed and that together we will grow Gusto into a larger national business. Gusto is already a successful brand but I believe this deal will see it become a recognised brand throughout the country."

Gary Tipper, managing partner at Palatine Private Equity, said: "We have been talking to the Living Ventures team for a number of years and we are delighted to be supporting them in this expansion of Gusto. The Gusto team have done an excellent job to date and we look forward to introducing the brand to other parts of the UK".

Deloitte provided financial advice to Living Ventures. The corporate finance team at BDO in Manchester advised Palatine. Barclays Bank and Beechbrook Capital provided debt.

The Living Ventures Group was founded in 1999 by Bacon and Roberts, and owns other well-known brands including Blackhouse, Australasia, Artisan and The Alchemist, and recorded group sales of £65m in the year to March 2014 - a 36% per cent increase on the previous year.


Tags: Gusto, Living Ventures, Peach Report
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GUSTO ~ Restaurant and Bar: Italian for taste and enjoyment
Inspired by the elegant charm of a classic Italian ristorante with a contemporary buzz and a modern, stylish interior, GUSTO brings the true "taste and enjoyment" of Italy to our guests.

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