Jamie Oliver’s restaurant group offers potential VC’s menu of strong profits

The private equity firm behind the Agent Provocateur lingerie chain and Hobbs shoes is contemplating a slice of Jamie Oliver after the celebrity chef’s restaurant business was put on the menu for a total value of £200m.

3i, the FTSE 100 investment group whose roots stretch back 70 years, is among a raft of investors to have been approached about taking a stake in Oliver’s restaurant business, which comprises of the Jamie’s Italian and Barbecoa chains.

Oliver’s firm has appointed Royal Bank of Canada to sell the stake in order to fund the expansion of both the brands internationally, with first bids due in next week.

Jamie’s Italian increased sales by 10% to £101.8m in the year to January 2014, although profits dipped by 22 per cent to £5.6m during those 12 months against a “backdrop of increased competition, heavy discounting by high street brands and continued strain on consumer spending”.

The most recent accounts for Barbecoa showed turnover up 7 per cent at £9.5m with profits up 4 per cent at £1.2m.

A source close to the process confirmed that 3i had undergone some discussions about buying a stake, although there is no certainty that it will even make a bid. The investor has just emerged from a three-year restructuring during which time it embarked on a selling spree, targeting a private equity portfolio of fewer than 40 companies. It owned 65 as of March this year.

However, industry watchers said that a restaurant business was an obvious target for 3i as it has experience in the sector, having once held a stake in the Giraffe chain before it was acquired by Tesco.

Other names the sector expected to have been approached by RBC include Lion Capital, a former investor in Wagamama. Duke Street, to which the noodle chain was sold in 2011, looked at the Oliver business but has decided not to make an offer.

A spokesman for Jamie Oliver Group also declined to comment on potential bidders or the size of the stake up for sale. In a statement earlier this year about the proposed sale of a stake in Oliver’s publishing arm, a spokesman told Sky News: “Like any well run private company, we regularly review our funding policy and requirements.

“All options, including bringing on board an external investor, are considered in order to position the group to take best advantage of the clear market opportunities that lie ahead.”

Oliver, who the Sunday Times Rich List estimates is worth £180m, was first spotted in 1997 during a documentary about the River Cafe, where he was working in the kitchen. He had only come in to work on the day of filming to cover for a colleague who was off sick, but when the show was aired he was quickly phoned by five different TV production companies.

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