BTG acquires TRG's leisure division

The Big Table Group (BTG), operator of Las Iguanas, Bella Italia, Banana Tree, Café Rouge and Amalfi, has announced the acquisition of The Restaurant Group's (TRG) leisure division. 

BTG now owns brands including Frankie & Benny's, Chiquito, Firejacks, Coast To Coast, Filling Station and EST, taking the group's estate to a total of 220 restaurants nationwide. 

Last year, BTG – which is backed by leading private equity group Epiris – acquired Banana Tree as part of its ongoing growth trajectory. Under its new ownership, the brand has expanded from nine to 15 sites, with plans to open a further three new locations before the end of the year. 

The make-up of TRG's leisure division complements BTG's existing portfolio, which focuses on both the family and experiential drinks markets. The deal is expected to complete at the end of October. As part of the transaction, TRG will pay BTG a cash contribution of £7.5m, subject to certain cash, debt and working capital adjustments. 

Alan Morgan, BTG CEO, comments: "Creating, developing and acquiring brands that complement our existing portfolio whilst offering widespread consumer appeal is a fundamental part of our growth strategy. This exciting acquisition forms part of that strategy and we are delighted to be welcoming this new team into the BTG."

 TRG's rationale

The sale of TRG's loss-making leisure business will accelerate the group's core strategic goals of adjusted EBITDA margin accretion and deleveraging. The transaction will leave the company with a high-quality group comprising three divisions: Wagamama, pubs and concessions, which have delivered strong like-for-like sales and adjusted EBITDA growth during the first half of 2023, with appealing long-term prospects.

The TRG board will continue to explore strategic options to further accelerate margin accretion and deleveraging. 

Andy Hornby, CEO of TRG, says: "A sale of our leisure business significantly accelerates our medium-term strategic plans to increase adjusted EBITDA margins and reduce leverage. On behalf of TRG, I would like to express our massive thanks to the extraordinarily hardworking and dedicated teams across the leisure business who have made huge improvements in the customer proposition over the last few years. We wish them all well as part of BTG."

Financial analyst Shore Capital adds: "We see the proposed disposal as a significant milestone for the group, improving cash flow, limiting the ongoing drag to revenues and profitability and significantly enhancing margins. We see a compelling investment case building on improving margins and focus on its attractive growth channels."

Image: Elliott Brown/Flickr

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