Al-Homaizi Group, a Kuwaiti conglomerate, has acquired UK roadside restaurant Little Chef for $23 million.
The transaction went through the UK arm of Kout Food Group, a member of the Al Homaizi Group. It already owns the Maison Blanc brand, as well as more than 40 Burger King and KFC outlets in the UK. Little Chef employs 1100 staff in 78 outlets.
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More details follows:
Rcapital, the owner of the roadside restaurant Little Chef, has today sold the business to a new owner, Kout Food Group Restaurants UK Limited (KFGR-UK).
KFGR-UK is wholly owned by Kout Food Group k.s.c.c., a company listed on the Kuwaiti Stock Exchange, and a member of the Al Homaizi Group. KFGR-UK also owns the iconic Maison Blanc brand, in addition to more than 40 Burger King and KFC units as well as Cha Cha Moon, a concept developed by Alan Yau for KFGR-UK.
Rcapital took the decision to explore options for the roadside restaurant business in April 2013 and appointed a corporate finance firm to manage the process. The aim was to find a buyer that would take the business and its operating brands on to the next stage.
Rcapital has a deep affection for Little Chef and strongly believed it could find a buyer to keep Little Chef on Britain’s A roads. Over a period of three months interested parties from the UK and abroad showed interest in purchasing the business. The offer from KFGR-UK stood out due to its commitment to grow the business and the brands.
Jamie Constable, CEO of Rcapital said: “Since we put Little Chef up for sale people have asked us, why sell the business? The answer is very simple. We are specialists in reversing the fortunes of businesses with significant financial and operational problems. We turn businesses around, we rebuild and fix them, that’s our business. Looking back, Little Chef was the biggest and longest turnaround in our nine year history.
“When we bought the chain, it needed huge changes to revive the business and bring it back to profitability. It was much harder than we expected. As the country faced one of the worst economic declines in living memory, we rolled up our sleeves and got on with it, we believed we could make it work and we did. “Having owned Little Chef for a long time it feels like we are selling part of ourselves. But we take comfort from the fact that the new owners will take the brand to the next stage.”
The private equity house that specialises in business turnarounds purchased Little Chef in 2007. Over the last six years, Rcapital has successfully completed an operational turnaround which has repositioned the business and brought the group of companies back into profitability. The move was part of a long-term rebuild strategy to create consistently profitable sites against the backdrop of one of the worst recessions in living memory.
The acquisition of the Little Chef group marks the entry of KFGR-UK into the all-day breakfast and travel dining segments, an estimated £3bn market in the UK. KFGR- UK’s Chairperson, Mrs. Fadwa Al Homaizi said: “KFGR-UK has exciting plans to revitalise the Little Chef brand. Little Chef will benefit from a process of brand renewal in keeping with current trends, supported by traditional British values.”
Kout Food Group which is the exclusive franchisee in Kuwait for Burger King, Pizza Hut (over 30 years), Applebee’s and Taco Bell, also operates a portfolio of Middle Eastern brands such as Ayyame, Kabab-ji, Burj Al Hamam and the gelato parlour concept Scoop A Cone.
Little Chef employs 1100 staff and serves more than 6m customers a year and has sites across Britain’s A-roads from Devon to Scotland. The restaurant chain has occupied a special place in the nation’s hearts for over 55 years.
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