Las Iguanas, the Bowmark Capital-backed chain, is on the verge of appointing advisers to explore options for the group, which could lead to a possible sale of the 32-strong brand, M&C Report understands.
It is thought that the group, which was founded in Bristol in 1991, will appoint BDO next month as advisers, but that a sale process will not start in earnest until next year. The group produced EBITDA of £5.6m for the year to the end of March. Taking into account new openings since the year end and some additional run-rate it is thought the business is on track to produce EBITDA in its current financial year of £7m-£8m, which at current market multiples of 10x suggest it could be valued at around £75m-£80m.
Although an IPO would be one option, it is understood that a private-equity backed management buyout of the company led by new chief executive Steve Hill would be the preferred course if a sale was explored. The former Wagamama chief executive will take up his new role at the start of next year.
At Wagamama, Hill oversaw its growth in the UK estate from 28 to 82 units, its launch in the US and the sale of the business by Lion Capital to Duke Street Capital in 2011 for c£215m, generating a shareholder return in excess of 3x investment
Bowmark acquired Las Iguanas for £27m in 2006 and the group saw turnover broke the £40m mark in the year to 30 March 2013, while pre-tax losses narrowed from just over £2m to £1.3m. It recently reported an 8.5% increase in like-for-like sales for the six months to the end of September, while overall group sales rose 18%.
Since the end of March, it has opened sites in Exeter, Plymouth, Wembley Designer Outlet and Cheshire Oaks, and is to add further restaurants in Bournemouth, Swansea, Glasgow, Chester and at Cribbs Causeway, Bristol. It is thought a site in Bracknell is being lined up for a 2015 opening.
Earlier this year, the company reiterated that as its new site rollout gathers pace, there is an opportunity to move its estate beyond 100 sites within the UK.
Last December, co-founder Eren Ali, who will take a step back from the day-to-day running of the group in January, said that Las Iguanas was set to explore opportunities internationally for the brand after receiving approaches from potential franchisees, with China and India mooted as possible destinations.
