T.G.I. Friday's

Casual dining chain

Business activity and description

T.G.I Friday’s UK franchise comprises 46 Friday’s® restaurants operating in 41 cities throughout the UK, employing approximately 2000 people. In March 2007, AAC Capital partnered with Carlson Restaurants, to acquire the UK franchise of T.G.I. Friday’s from Whitbread plc.

Deal Information

• Deal size: GBP 23 mln
• Deal size at exit: GBP 60 mln
• Deal type: Trade sale
• MoneyMultiple: 3.8x
• Date of investment: March 2007
• Date of exit: July 2010
• Bought from: Whitbread
• Sold to: Carlson Inc.

Investment rationale

AAC Capital took a majority stake with 60 percent ownership of the operating company, while Carlson owned the remaining 40 percent, with an exclusivity option to buy out AAC Capital’s stake. During AAC Capital’s ownership, the business focused on a combination of improvements in processes and cost control, and investment in new and existing restaurants, staff and technology. Over that time, the UK franchise outperformed the casual dining market with like-for-like sales of over five percent, grew margins considerably, more than doubled EBITDA, opened two new restaurants, developed an outstanding management team and established a strong basis for future growth. The transaction results in AAC Capital achieving a return of 3.8x on its original investment.