LONDON, UK: Rock BidCo Limited, a special purpose vehicle indirectly owned by the Apollo Funds, managed by affiliates of Apollo Global Management, has agreed to acquire The Restaurant Group plc (TRG) at the rate of 65 pence/share in cash valuing the acquisition at approximately £506 million on a fully diluted basis, and implies an enterprise value of £701 million and a multiple of approximately 9.0 times TRG’s Adjusted EBITDA for the twelve months ended 2 July 2023.
Apollo Global Management has closely followed TRG over many years and believes that TRG is a high quality and leading company in the casual dining market with an attractive portfolio of concepts and brands and an experienced management team with a clear vision and strategy for the future direction of TRG. These are all characteristics which are highly valued by Apollo.
Apollo believes TRG has established itself as a highly regarded operator, with the necessary capabilities and scale required to attract and retain customers and the best talent in the industry. Bidco holds the TRG management team in high regard and values their operational expertise and experience.
Rock Bidco intends to work with the existing management and employees of TRG to support the business with a view to providing attractive and sustained growth and development opportunities for TRG’s stakeholders. Apollo is highly supportive of TRG’s management strategy and it is confident in the future prospects of TRG’s businesses.
Commenting on this announcement, Ken Hanna, the Chair of TRG, said: “TRG operates a diverse portfolio of some of the UK’s leading hospitality brands. As a result of ongoing positive management actions and the margin accretion plan we announced in March this year, the group has recovered well from the challenges of the pandemic and the cost of living crisis.
This is evidenced by the continued strength of our trading performance versus the broader hospitality sector and the share price increasing 55% this year. In addition, the TRG Board and management of TRG have reviewed in detail the strategic options available to the group, resulting in the announcement of the proposed sale of the Leisure business.
The TRG Board continues to have confidence in the plan, but is cognisant of the premium and the certain value of the Apollo offer against the backdrop of a challenging macro-economic environment. As such, the TRG Directors intend to unanimously recommend the offer to TRG Shareholders.”
Commenting on this announcement, Alex van Hoek, a Partner in AGM’s private equity business, said: “This investment aligns with our strategy of backing industry leading companies to drive profitable growth over the long-term. TRG’s business has proven resilient through macroeconomic cycles but the outlook is still one of high interest rates and inflationary pressures and the company now needs the support of patient private capital, to achieve its ambitions. We look forward to working with the management team and investing in TRG to accelerate its long-term strategy, leveraging our significant industry experience.”
