Fulham Shore, the David Page-led vehicle, which operates The Real Greek, has conditionally agreed to acquire the 10-strong Franco Manca chain for c£27.5m.
The company believes that like the Real Greek, Franco Manca has the potential to grow to at least 40 restaurants in the UK over the next five years.
The acquisition is to be satisfied by approximately £6.2min cash and the balance of approximately £21.3 million by the issue of 193,457,975 new Ordinary Shares at 11p per share
At the same time, the company said it had raised a total of £4.75m via a placing and subscription of new ordinary shares at 11p per share and agreed new credit facilities with its bank, HSBC, which provides a revolving credit facility of £6m and an overdraft facility of £500k.
The revolving credit facility is for a fixed term of four years and attracts an interest rate margin of between 1.5% and 2.5% over LIBOR on amounts drawn down.
The fundraising will be used to refinance the outstanding loan facility acquired with Kefi Limited of £860,000; for investment in the company’s existing restaurants; funding the expansion of The Real Greek; and funding future acquisitions and expansion of any acquired brands.
Page, chairman of Fulham Shore, said: “We’re delighted to have agreed to acquire Franco Manca, an excellent growing business. The success to date of our franchise on Tottenham Court Road encouraged the Board to pursue this acquisition. Alongside The Real Greek, we believe we are creating a portfolio of exciting and well regarded restaurant brands.
“We believe that the staff working at our restaurants are key to the success of our business. As such we intend to gift shares in the Company to a share incentive scheme, which will be used to provide each and every member of our staff with 1,500 shares in Fulham Shore.”
