The boards of Papa Bidco Limited (a newly-incorporated company indirectly owned by the TPG Funds) and Prezzo plc have just announced that they have reached agreement on the terms of a recommended cash acquisition pursuant to which Bidco intends to acquire all of the issued and to be issued share capital of Prezzo.
Under the terms of the Transaction, each Prezzo Shareholder will be entitled to receive 126.5 pence in cash for each Prezzo Share held, which values the entire issued and to be issued share capital of Prezzo at approximately £303.7 million.
The Transaction values the Company at:
- 9.9 times Prezzo’s reported adjusted EBITDA of £28.9 million for the financial year ended 29 December 2013;
- 9.2 times Prezzo’s reported adjusted EBITDA of £31.0 million for the twelve months ended 29 June 2014; and
- 18.5 times Prezzo’s reported adjusted diluted earnings per share of 6.85 pence for the financial year ended 29 December 2013.
The Prezzo Directors unanimously consider the terms of the Transaction to be fair and reasonable and intend unanimously to recommend that Prezzo Shareholders vote in favour.
Bidco has received irrevocable undertakings from each of the Prezzo Directors who is interested in Prezzo Shares, representing approximately 13.81 per cent of the share capital of Prezzo.
Bidco has also received irrevocable undertakings from certain members of the Kaye Family and certain other shareholders of Prezzo to vote in favour in respect of a further 48.52 per cent of the share capital of Prezzo.
About Bidco
Bidco is a company incorporated under the laws of England and Wales for the purposes of the Transaction and is owned indirectly by the TPG Funds. TPG is a leading global private investment firm founded in 1992 with $66 billion of assets under management. TPG has invested in a number of food and food service companies globally including Del Monte, Chobani and Ingham, and has been a long term investor in Burger King. Bidco believes it is therefore well positioned to support the future growth of Prezzo and offer strategic, financial and operational guidance in delivering future growth for Prezzo.
Taking Prezzo to the next level
Commenting on the Transaction, Abel Halpern, Partner of TPG, said:
“The Prezzo story is one of consistent and robust growth, driven by a business model based on operational excellence. We look forward to taking Prezzo to the next level and optimising the Company’s full potential.”
Commenting on the Transaction, Michael Carlton, Chairman of Prezzo, said:
“Since the business was founded in 2000, the Kaye family and management have built Prezzo into a successful UK casual dining business with 249 restaurants. To continue to maximize the growth of the business, the Board has concluded that new skills, infrastructure and investment will be required and we are pleased to recommend the Bidco offer, which is in the interest of all shareholders.”