Tano Capital is in talks to invest Rs 100 crore ($20 million) in the restaurant chain operator Barbeque Nation Hospitality Ltd, a subsidiary of the public-listed Sayaji Hotels Ltd, for a minority stake, two people with direct knowledge of the development told VCCircle. This follows a proposed investment by Renuka Ramnath-promoted Multiples Alternate Asset Management, which did not fructify last year.
“Talks with Multiples had been put off due to valuation mismatch and other issues,” said one of the sources, without elaborating on those issues. According to another source, the structure of the deal led to issues in the investment and the investors pulled off.
Spokespersons of Tano Capital and Barbeque Nation could not be reached for comments.
Started in 2006, Mumbai-based Barbeque Nation currently operates 21 branches in cities like Bangalore,
Delhi, Pune, Chennai, Hyderabad, Kolkata, Vadodara, Ahmedabad and Jaipur. The company works on the concept of a live grill and customers can actually cook their food on the grill 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.
According to stock exchange filings, last August, Sayaji’s board of directors had proposed to make a preferential allotment of equity shares in its subsidiary Barbeque Nation to an unnamed financial investor. The final decision was postponed and there had been no further announcement from the company yet.
In May 2006, Clearwater Capital bought 14.92 per cent stake in Sayaji Hotels for Rs 11.81 crore by purchasing 1.79 million shares at a price of Rs 66 per unit. It 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.
According to VCCEdge, the financial research platform of VCCircle, food, beverage & restaurant space has witnessed 21 private equity and venture capital investments worth $349.75 million in 2011 and recorded two transactions worth $2.82 million since January 2012.
Last year, India Equity Partners invested $40 million in Delhi-based Sagar Ratna Restaurants Pvt Ltd. ICICI Venture also invested around $55 million in Devyani International, which runs the franchises of Pizza Hut and Costa Coffee in India. Earlier, TVS Shriram Growth Fund invested in Om Pizzas & Eats Pvt Ltd and celebrity chef Sanjeev Kapoor’s Indiancookery.com Pvt Ltd.