SFI's Slug & Lettuce brand will overtake Six Continents' All Bar One in the outlets rankings once the Parisa cafe bars it acquired last Friday in a £15m deal have been converted.
The price SFI will pay is just half the sum being talked about when Parisa's founded, Nader Haghigi, was planning a management buy-out of the chain back in July.
It is also, in effect, a self-financing deal, according to SFI's chairman and chief executive, Tony Hill. The £8m cash required up-front will come from money put aside for SFI's organic growth plans, delaying eight new bar openings previously planned for next year, while the other £7m payable over two years will come from future earnings or the issue of shares: the Parisa chain's sales are currently £18.2m. The deal represents an ebitda multiple of 4.7, against multiples of as much as 7 in some recent deals.
The two chains make a surprisingly good fit, with only five "duplicate" sites, in the City of London, Putney in west London, Bristol, Nottingham and Harrogate. Of these, the Putney Parisa will become a Slug while the Slug will be turned into a Litten Tree bar, and the Bristol Parisa will become a Slug while the nearby Slug will be transformed into a 7,000 sq ft Havana late-night latin-themed dance bar.
Most of the 24 Parisa bars will be converted to Slugs, for a low £50,000 to £100,000 a time. It will mean the chain will be approaching 60 outlets by the end of this year, ahead of All Bar One's 55 sites. Even with eight delayed openings, SFI still intends opening 22 new high street bars during its current financial year, giving it with the Parisa conversions 46 new outlets. The Parisa purchase also includes four sites with planning and licensing permission in place.
Hill said SFI had "other intentions" for the Persia restaurant in Manchester that came with the deal, and was "working out what brand to put in" to the remaining Via Vita site left over from Parisa's acquisition from Wolverhampton & Dudley last year.
Meanwhile trading at SFI's core brands was "very much higher" than last year, Hill said, with business at the outlets in the West End of London that had suffered after September 11 now "very largely recovered".
The price SFI will pay is just half the sum being talked about when Parisa's founded, Nader Haghigi, was planning a management buy-out of the chain back in July.
It is also, in effect, a self-financing deal, according to SFI's chairman and chief executive, Tony Hill. The £8m cash required up-front will come from money put aside for SFI's organic growth plans, delaying eight new bar openings previously planned for next year, while the other £7m payable over two years will come from future earnings or the issue of shares: the Parisa chain's sales are currently £18.2m. The deal represents an ebitda multiple of 4.7, against multiples of as much as 7 in some recent deals.
The two chains make a surprisingly good fit, with only five "duplicate" sites, in the City of London, Putney in west London, Bristol, Nottingham and Harrogate. Of these, the Putney Parisa will become a Slug while the Slug will be turned into a Litten Tree bar, and the Bristol Parisa will become a Slug while the nearby Slug will be transformed into a 7,000 sq ft Havana late-night latin-themed dance bar.
Most of the 24 Parisa bars will be converted to Slugs, for a low £50,000 to £100,000 a time. It will mean the chain will be approaching 60 outlets by the end of this year, ahead of All Bar One's 55 sites. Even with eight delayed openings, SFI still intends opening 22 new high street bars during its current financial year, giving it with the Parisa conversions 46 new outlets. The Parisa purchase also includes four sites with planning and licensing permission in place.
Hill said SFI had "other intentions" for the Persia restaurant in Manchester that came with the deal, and was "working out what brand to put in" to the remaining Via Vita site left over from Parisa's acquisition from Wolverhampton & Dudley last year.
Meanwhile trading at SFI's core brands was "very much higher" than last year, Hill said, with business at the outlets in the West End of London that had suffered after September 11 now "very largely recovered".
