The private equity owners of Wagamama, the UK-based noodle chain, have decided not to sell the business, M&C Report understands.
Lion Capital, which also has investments in the Kettle Chips snacks business and Weetabix cereals, had been in talks with several other private equity houses over a tertiary buyout.
MidOcean Partners, the owners of LA Fitness and Advent International, a former investor in the Fat Face and New Look retail chains, were thought to be interested. TDR Capital, a former investor in Gondola Holdings, had also been linked to a possible deal.
It is thought that Lion Capital and the Wagamama management team, led by executive chairman Ian Neill and chief executive Steven Hill, were unable to agree a valuation with would-be buyers.
A buyout situation arose after a planned IPO was postponed when institutions bulked at the £225m valuation of the business, including debt.
Wagamama is now expected to press ahead with the expansion of the business both in the UK and in America, where it has two restaurants in the Boston area plus a third under construction. It is looking for further US sites in Boston, New York and Washington.
It will also continue to seek new international territories through franchise agreements, under which restaurants trade in Europe, the Middle East, New Zealand and Australia.
The chief executive of a leading casual dining chain, who asked not to be named, told M&C: “Withdrawing seems perfectly sensible. It is a great business and the logical step would be to open more restaurants in the US, prove the business case there, and then return to the market when conditions are more favourable.”
The company, which was founded in 1991, last year produced underlying earnings of £10.5m on sales of £71.6m. Lion bought the business for £102.5m two years ago.
It will open its 52nd UK restaurant on 7 December in Walton on Thames, and believes there is the potential to reach 150 in the UK alone.
Wagamama and its advisers could not be reached for comment.
