Famous Brands, the South African fast food company, has acquired a 75% stake in Wimpy UK, the fast-casual dining chain, for £3m, valuing the company at £13m.
The company has acquired the stake from the management team, which acquired the business in 2002 in a secondary buyout backed by Halifax Bank of Scotland, which will retain its 25% shareholding.
Famous Brands, which operates 452 Wimpy sites in South Africa, said it would invest £2m in re-energising the brand.
It said its £5m investment would be funded through a combination of cash reserves and debt finance.
Wimpy UK is currently funded via a debt structure of £9m.
It comprises 194 outlets across England, Scotland and Wales, plus a further 20 restaurants operating under a master licence arrangement in Ireland.
The deal, which Famous Brands said had been two years in the making, is expected to complete on 5 March.
Kevin Hedderwick, chief operating officer at Famous Brands, said: “We are delighted to announce a transaction of this nature which provides a strategic opportunity to consolidate the Wimpy brand and gain access to the UK market.
“Management’s immediate focus will be on consolidating and optimizing the existing structure, and as such, we will proceed with caution regarding the opening of any new restaurants in the immediate short term. The same will apply regarding the rollout of any of our other brands in the UK.”
Over the medium term Famous Brands said its intention will be to explore opportunities to expand the Wimpy brand globally and that opportunities to export its manufactured products to Wimpy UK will also be investigated.
The group said the long-term goal will be to use the Wimpy UK platform to launch a multiple brand offering for Famous Brands globally.
Darren Hele, divisional director for the franchising of Famous Brands, and formerly managing director of Wimpy SA, will replace John Davison as chief executive of Wimpy UK.
