Investment Completion: Rosa's Thai Cafe
24 May 2019
- Private investor clients allocate to co-investment with leading sector specialist TriSpan
- Connection Capital clients recently saw 3.4x money returns on Wagamama’s sale to The Restaurant Group
Investor appetite remains strong for specific opportunities with the right dynamics in the UK’s casual dining sector - despite the current challenging conditions on the high street, says Connection Capital, the specialist private client investment business.
Connection Capital recently completed an allocation to a management buyout (‘MBO’) of Rosa’s Thai Café, alongside leading private equity firm TriSpan LLP, a specialist in this sector with an impressive investment track record as well as operational expertise.
Rosa’s is a profitable 17-strong chain of Thai restaurants, primarily based in London, which is now targeting a roll-out to 45 sites (both restaurants and ‘grab-and-go’ outlets) UK-wide over the next five years. Openings to date have evidenced a high return on capital model, and the business is also outperforming the market in its like-for-like sales growth, running at 10.9% in recent trading .
The brand was ranked as the sixth fastest growing UK restaurant chain in the AlixPartners Growth Company Index 2019.
Established in 2008 by award-winning husband and wife team Alex and Saiphin Moore, Rosa’s is now run by ex-Wahaca director Gavin Adair as CEO, with former Yo! Sushi CEO, Robin Rowland OBE, as Chairman.
Connection Capital says that Rosa’s is a well-positioned brand, with a differentiated value proposition of high quality, authentic Thai dishes (cooked by Thai chefs using ingredients sourced from Thailand), at an affordable price point, operating in a market that remains highly fragmented.
The Asian niche of the market has seen robust growth in recent years, especially as Asian food has come to be seen as a healthier alternative to American or Italian food, and Euromonitor forecasts growth will continue at 8.9% per annum until 2022.
Moreover, ‘branded Asian’ is expected to be the fastest-growing segment in the UK full service restaurant space, and the Rosa’s concept also lends itself to the rapidly-growing delivery market too.
Connection Capital has experience of successful investing in this space. It participated in Duke Street Capital/Hutton Collins’ syndicated investment in Wagamama in 2011, delivering a 3.4x money return for its private investor clients when the brand was bought by The Restaurant Group last year.
TriSpan manages the TriSpan Rising Stars fund, which is dedicated to investing in emerging restaurant brands that they consider are poised for significant growth. TriSpan’s senior partners’ previous investments include: Anthony’s Coal Fired Pizza and Dunkin Donuts.
Bernard Dale, Managing Partner at Connection Capital says, “Rosa’s Thai Café’s differentiated and well thought-through business model puts it in an excellent position to exploit growth opportunities, even with today’s macro-market headwinds. We’re delighted to have come on board with TriSpan to back Rosa’s experienced management team as they take the business forward.”
“We believe TriSpan has absolutely the right deal rationale and value creation strategy to make this an exciting opportunity for our clients: buying into a top-performing concept that is poised to take advantage of trends for fast-casual Asian food, healthy eating and delivery. As well as carefully timing the roll-out pipeline to take advantage of favourable retail site opportunities, a focus on developing central capabilities and operational improvements should drive growth even in more mature sites.”
About Connection Capital
Connection Capital LLP is a Financial Conduct Authority authorised and regulated, specialist syndicator of investment funds from private investors into direct private equity, private debt and commercial property deals, as well as alternative asset funds. It currently has over £285 million of funds under management (as at September 2019) across a diverse portfolio, including investments in Virgin Wines and property tenanted by Travis Perkins and Premier Inn.
Connection Capital provides a specialist managed service to help professional clients build up their own alternative asset portfolios. Private investors self-select which opportunities they want to take a stake in, investing in £25,000 tranches. Opportunities are identified and negotiated by Connection Capital, which also carries out all due diligence and manages the investment from completion through to exit, on its clients’ behalf.