Restaurants

The Restaurant Group acquires Barburrito

The sites have historically generated strong returns on invested capital in excess of 30% and TRG is said to believe there is ‘significant scope’ to further develop and expand the brand, particularly in the south of England, where the chain’s presence is reportedly limited

The Restaurant Group has acquired Mexican style fast-casual restaurant chain, Barburrito, for £7m, an asking price that is said to represent a run-rate EBITDA multiple of 4.4x for the next 12 months. 

It is reported that Barburrito focuses on serving fast, fresh and healthy Mexican food, and operates across 16 sites in high-footfall locations across shopping centres, city centres and transport hubs. 

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The group reportedly believes that the Barburrito proposition is “well aligned with key consumer trends”, which includes healthy eating, convenience, customisable cuisine and offering high-quality products at attractive prices with an average spend per customer of around £10.

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The sites have historically generated strong returns on invested capital in excess of 30% and TRG is said to believe there is “significant scope” to further develop and expand the brand, particularly in the south of England, where the chain’s presence is reportedly limited. 

The initial expansion plan is said to be to double the existing estate over the next four years.

As part of the acquisition, Barburrito will be integrated into TRG’s leisure and concessions division, with the key operational team from Barburrito to be retained. The leisure concessions team is said to be very familiar with the business, having operated two sites previously as franchises in UK airports.

In addition, Barburrito’s 16 existing sites are expected to contribute a company level EBITDA and PBT of around £1.6m and £0.8m respectively to the group over the next 12 months. 

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