Sun 20th Oct 2024 - Exclusive: Breal and Calveton paid £9.55m to acquire TGI Fridays out of administration Exclusive – Breal and Calveton paid £9.55m to acquire TGI Fridays out of administration: Breal Capital and Calveton, which acquired D&D London last year, paid a total consideration of £9.55m to acquire the bulk of TGI Fridays UK out of administration, Propel has learned. The deal, announced earlier this month, through a new vehicle, the Liberty Bar and Restaurant Group, saw 51 out of the 87 TGI Fridays across the country acquired, with circa 2,300 jobs saved, while 35 sites were closed. Teneo was appointed administrators to the business – Thursdays UK and parent company Hostmore – during the summer. It came after a poor trading performance in 2024, with like-for-like sales down circa 12%, which led the business to experience “significant cash pressures”, which resulted in a forecast funding requirement of circa £12m in the week commencing 30 September 2024, driven by “material liabilities falling due from the end of the third quarter of 2024”. As at 31 July 2024, Thursdays UK had secured debt totally £40.2m provided by a syndicate of banks, this comprised a £18.6m term loan, which was fully drawn at the date of the appointment of the administrators; and a £21.6m revolving credit facility, drawn to £17.5m, at the date of appointment. During the sale process the business received three indicative offers, with the headline enterprise values ranging from £10m to £36m, all three assumed the lenders would roll whole or part of their debt into the purchasing entity. Bidder two (Breal and Calveton) placed an offer on 6 September 2024 with a headline consideration of £10m, with £4m working capital facility and £3m of purchasing loan notes. Bidder one – headline consideration of £37m and £36m of debt rolled into the purchasing entity – did not re-enter the process. Bidder three proposed a headline consideration of £15m and debt to be written down to £13m and rolled into the purchasing entity. A trade party entered the process on 10 September 2024, with an indicative offer of £6m. However, this offer was not progressed. Breal and Calveton submitted a final offer on 27 September 2024, with a headline consideration of £9.25m, a £750,000 reduction from its initial offer, “reflecting trading of the company and the position with regards to the amounts owed to its landlords of the premises”. The headline consideration was £9.25m plus consideration for the cash in the acquired premises, estimated at £296,000. The administrators report said: “I am advised that the purchaser will be provided with significant new investment (in shareholder loans plus an additional revolving credit facility from the purchaser’s funder) that should provide the necessary working capital going forward and allow the business to continue on a more stable financial footing in the future. The purchaser will only be taking the 51 profitable sites forward and will not be liable for the significant creditor burden and debt servicing obligations in the company and combined with the operational synergies in the wider Breal and Calveton businesses this should allow the purchaser to be a viable and profitable entity.” The collapse of TGI Fridays’ UK parent came less than six months after it struck a deal to reverse the US restaurant business of the same name into London-listed Hostmore, in a deal which was subsequently abandoned. TGI Fridays UK (Hostmore) features in the Premium Club Turnover & Profits Blue Book, which is available exclusively to Premium Club members and features 994 companies. TGI Fridays’ turnover of £190,700,000 for the year ending 31 December 2023 is the 61st highest in the database. 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 kai.kirkman@propelinfo.com to upgrade your subscription.