Serial entrepreneur and investor Luke Johnson has said that “now is a great time to do deals” following his private equity firm’s bolt-on acquisition of 11 sites from Tootsies for portfolio restaurant business Giraffe.
Risk Capital Partners (RCP), of which Johnson is chairman, is pursuing an ambitious programme of bolt-on acquisitions on behalf of its portfolio companies, on the back of his belief that now is the “ideal time” to acquire companies.
“Current economic uncertainties mean now is a great time to do deals for both our existing portfolio companies, and in looking for new transactions," he said.
"We firmly believe in backing our management teams in their growth plans. And we think our willingness to make minority investments – as well as pure buyouts – is particularly well suited to the current environment."
Earlier this month, RCP’s acquisition of 11 Tootsies sites out of administration took Giraffe up to 41 branches.
“This deal will transform Giraffe and it shows how ambitious we are,” said Johnson.
"Giraffe has proved resilient despite tough economic conditions, and we are delighted to help Russel Joffe and his team at Giraffe grow the business by opportunistically acquiring some great sites," says Ben Redmond, the RCP Partner who led the final negotiations for Giraffe.
The Giraffe transaction is the third recent bolt-on acquisition for an RCP portfolio company, following Seafood Holdings' acquisition of Openshaws in August and Patisserie Holdings' purchase of upmarket deli Baker & Spice.
RCP's recent acquisitions follow the closing of its £75m institutional fund earlier this year, which is aimed at taking advantage of the squeeze in available bank funding and other forms of credit.
"We are looking to back ambitious managers who want to expand their companies, through a mix of traditional buyouts and development capital transactions," said Johnson.
He added that RCP likes to invest between £3m and £10m in each new partnership.
Johnson, best known for his role in the expansion of Pizza Express, is also currently chairman of Channel 4, a tenure which will end in January.
© Crimson Business Ltd. 2009