Relevant Documents:Electra Fiscal 2020 Report
Edison Research Report
U.K. restaurant group TGI Fridays is being put up for sale by owner Electra Private Equity with HSBC and Numis running the auction process, a spokesperson for Electra told Reorg.
A report commissioned by Electra’s management estimates that TGI Fridays has an enterprise value of £147 million, based on a multiple of 5.7x of its 2019 EBITDA. Electra acquired TGI Fridays for £99 million in 2014 and injected a further £37 million in the company in August 2017.
Prior to the Covid-19 outbreak, TGI Fridays generated revenue of £214.8 million and EBITDA of £25.6 million in 2019, according to Electra’s financial report for the year ended Sept. 30, 2020. The report stated that the restaurant chain faced challenging market conditions in 2019 and that Robert Cook became the CEO in December 2019.
Covid-19 disrupted the group’s activities in 2020 and net debt rose from £30 million in March 2020 to £39 million in September 2020 due to payment deferrals. Electra said TGI Fridays is expected to close 2020 with revenue down around 40% year over year and a small positive EBITDA.
The restaurant chain’s banking facilities expire in August 2022 and Electra notes that in the “normal course of events” it would be seeking to refinance them in 2021. However, Electra warns that “the Covid-19 pandemic has increased refinancing risk generally, and particularly in the hospitality industry.”
The sale of TGI Fridays is part of Electra’s plan to sell off all its assets and return the proceeds to its shareholders by the end of the year. The private equity group owns a number of U.K. middle market companies including retailer Hotter Shoes and Sentinel, a manufacturer of water treatment products for heating systems.
--Lara Gibson