Multiples Alternate Asset Management, a private equity firm floated by the former ICICI Venture CEO Renuka Ramnath, is in talks to pick up a significant minority stake in Barbeque Nation, a subsidiary of the BSE-listed Sayaji Hotels, at least two people briefed with the matter told VCCircle.
The private equity firm is in talks to invest $15 million or Rs 69 crore for 26-30 per cent stake, thereby valuing the company at around Rs 260 crore – more than the valuation of its parent company, Sayaji Hotels. The current market capitalisation of Sayaji Hotels is Rs 199 crore.
Barbeque Nation works on the concept of a live grill and customers can actually cook their food on grills, as one is embedded in each table. The restaurant offers veg and non-veg barbeque starters (unlimited helpings), a main course buffet, soups, salads, desserts and a great variety of liquors.
Barbeque Nation (Mumbai) was started by Sayaji Hotels Ltd in 2006. After a successful opening in the country’s commercial capital, Barbeque Nation went on to open branches in Bangalore and Hyderabad in 2007.
While the deal has been in works for some time, of late, it went a little sour owing to the difference in the equity structures between the company and the investor. The company also issued a statement to this effect: Sayaji Hotels Ltd has informed the BSE that the Meeting of the Board of Directors of the Company, which is scheduled to be held on August 24, 2011, (to authorise M/s Barbeque-Nation Hospitality Ltd (subsidiary of the company) to execute necessary agreements for the purpose of issue of fresh equity shares on a preferential basis has been postponed and new venue will be notice shortly. Sources tell VCCircle that the issues between the two parties have been resolved now and that the deal is expected to be concluded in next two-three weeks.
In May this year, Clearwater Capital Partners sold 2.85 per cent stake in Sayaji Hotels Ltd through open market transaction for Rs.6.5 crore.
In May 2006, Clearwater Capital bought 14.92 per cent stake for Rs.11.81 crore by purchasing 1.79 million shares at a price of Rs 66 per share. It has also invested in FCCBs, which increased its stake to 32.87 per cent after the conversion. After the stake sale, it now holds 30.02 per cent stake in the company.
This is a second deal for Multiples, which recently closed a transaction with Dehradun-based Sara Sae Pvt Ltd, a manufacturer of hi-tech drilling equipment for land and jack-up rigs.
Multiples is a sector-agnostic fund, looking to invest $15-$50 million in high growth, mid-sized Indian companies and management-led buyouts/spin-offs.
According to VCCedge, the financial research platform of VCCircle, the Indian restaurant space has seen 26 private equity deals worth $355 million over the last five years. And the most recent one was the $40 million investment by India Equity Partners in Delhi-based Sagar Ratna Restaurants Pvt Ltd.
ICICI Venture recently invested around $55 million in Devyani International, which runs the franchises of Pizza Hut and Costa Coffee in India. TVS Shriram Growth Fund also invested in Om Pizzas & Eats Pvt Ltd and celebrity chef Sajeev Kapoor’s Indiancookery.com Pvt Ltd.