Noodle bar chain sold in £102.5m deal

JAPANESE noodle bar chain Wagamama was today poised for new ownership after serving up a deal valuing it at £102.5m.

The group, which has opened in towns and cities across the UK since it was founded in 1992, will see private equity firm Lion Capital take a majority stake. It will help fund the next stage of a rapid expansion that has seen the chain cash in on the trend towards healthier eating in the UK.

Wagamama's restaurants are modelled on Japan's popular 'ramen' bars. They feature canteen-style seating and orders taken on handheld gadgets are sent to the kitchen by radio signal.

The chain plans to open its 50th outlet at London's Royal Festival Hall this summer. Its UK sites are in places such as Manchester, Bristol, Nottingham and Basingstoke, while its clutch of international locations include Dubai, Australia and Amsterdam.

Lion Capital did not reveal the size of the stake it was buying, although seller Graphite, also a private equity firm, will retain 12.3%. Graphite bought the original Wagamama sites in 1996 for £4.5m.

The management team led by chief executive Ian Neill will hold on to a 'significant interest'.Lyndon Lea, founding partner at Lion Capital, said Wagamama was a well-recognised brand in a 'rapidly growing and under-penetrated niche' in the sector.

Mr Neill said Lion's expertise in working with 'brand-oriented' companies would be invaluable in taking the chain into the next stage of its expansion.

Graphite had hoped to float Wagamama on the stock market but these plans were put on hold last year after it received approaches from venture capital firms.

It later agreed a £63m refinancing package that helped fund its recent expansion. Today's deal is set to be completed next month.