Various Eateries plc announced plans to join AIM by early October at latest, hoping to raise up to £25mln with the initial public offering.
The restaurant group, which seeks a listing in one of the hardest times for the industry, would use the funds to roll out its Coppa Club and Tavolino brands and expand the portfolio through acquisitions of troubled competitors.
Its directors believe there will be a power shift in favour of tenants and operators in light of the pandemic, with potential one-way tenant breaks, upward and downward rent reviews and leases linked to turnover.
Observing a change in consumer behaviour, the Coppa Club and Tavolino venues pride themselves of large outside seating and potential for social distancing.
Six-year-old Various Eateries made a pre-tax loss of £16mln in 2018, then sold most of its Strada venues and converted the ten sites left in the two new upscale formats.
Summer trading has been between 50-60% of 2019 levels in the central London locations, while those in the rest of the country are nearly recovering to pre-pandemic figures.
A seasoned founder
Founder Hugh Osmond is behind the expansion of Pizza Express, which he bought in 1993 with Sunday Times columnist Luke Johnson when it was still a chain of 12 restaurants.
Osmond left it in 2001 after having turned it around to a 367-strong estate making £38mln of annual underlying earnings (EBITDA).
Meanwhile, he had co-founded Punch Taverns in 1997 which expanded to 8,000 outlets and an enterprise value of £3.5bn in 2005.
His interests seem to have turned, having told the Financial Times earlier this summer that high street casual dining chains have “no future” after coronavirus.
Osmond went as far as saying that private equity firms snapping up struggling brands, such as TowerBrook Capital Partners buying Zizzi owner Azzurri, are at risk of bankruptcy.
He said midmarket branded restaurants are experiencing massive sector oversupply, high costs and a decline in customers even before the pandemic.
He is now at the helm of a private equity firm, Sun Capital, and last month lodged a US filing to raise up to US$345mln for a new vehicle to acquire struggling UK business, according to the Times.
On the board
Various Eateries’ chairman, Andy Bassadone, initially founded Strada in 1999 and sold it off in 2005 for £56mln.
He remained as chief executive until 2007, when he went on to launch French Bistro chain Côte, sold in 2013 for £100mln.
More recently Bassadone has led the expansion of Bill's Restaurants and The Ivy Collection, then joined Various Eateries last January.
The rest of the management team are also industry veterans, with chief executive Yishay Malkov coming from The Ivy Collection and Gordon Ramsay Holdings, while chief financial officer Oli Williams was in senior finance positions at itsu and McDonald's.
“I believe that Covid-19 is the biggest event to hit the UK economy outside of war-time,” Osmond said on Thursday. Whilst I deplore the terrible effect it has had on our industry, we are confident that there will be major opportunities for a well-funded group with strong management to build a fantastic business in the aftermath of Covid.”