3i invests in Giraffe restaurant chain

23 Oct 2006

3i today announces it has invested £10m for a minority stake in the fast growing, family friendly restaurant chain Giraffe, valuing the business at £24m. 

The funding will support a major national roll-out over the next 3 years, as well as facilitating an exit for some of the early 'angel' investors in the business.  Giraffe currently operates 11 outlets at locations in and around London, including Spitalfields and Royal Festival Hall, as well as a franchise at Heathrow.  The roll-out will deliver 8-10 new openings per year and target high street locations as well as new retail/leisure developments.  New restaurants will open in the Trafford Centre, Manchester and thecentre:mk in Milton Keynes in November 2006.

3i is partnering with CEO Russel Joffe, Juliette Joffe and Operations Director Andrew Jacobs - founders of Giraffe - who will continue to run and grow the business.  Russel previously founded, developed and sold the Café Flo chain of restaurants.  Giraffe's Chairman is Luke Johnson, who has had previous success in the sector with Pizza Express, My Kinda Town and Signature Restaurants and has been invested in Giraffe for a number of years through his private equity vehicle Risk Capital Partners.

The UK restaurant sector is performing strongly driven by lifestyle factors such as higher disposable incomes, longer working hours and an increased spend on leisure activities.  There is also an increasing trend away from home cooking, especially amongst the time-poor younger generation, which has supported strong growth of the casual dining sector.  Giraffe is a successful all-day format, proven in London as an attractive, affordable, fun eating-out venue for young families, shoppers and workers.  There is considerable potential to roll this format out across the UK.

Russel Joffe, CEO Giraffe, commented: "We have chosen to partner with 3i due to its strong sector credentials and its extensive experience in supporting fast growing companies."

Justin Maltz, who led the deal for 3i, commented: "Russel has developed a restaurant concept, based on global food, world music and great service, which has mainstream appeal.  We were attracted to Giraffe due to its strong performance, attractive growth prospects and outstanding management team.  Both Russel and Luke have tremendous experience in rolling out successful restaurant concepts and we are confident in the company's ability to successfully expand its dining experience to customers across the country."

Giraffe will join the growing 3i portfolio of consumer businesses.  3i has a wealth of specific sector experience derived from current investment in Spanish coffee house Café Y Te and past investments in EAT, the premium end sandwich and coffee company and La Tasca, the Spanish tapas bar and restaurant chain. 

3i were advised by Edmund Reed of Travers Smith, with financial due diligence undertaken by James Fillingham of PriceWaterhouseCoopers.  Giraffe and its existing shareholders were advised by Michael Harris of Howard Kennedy.

Notes to editors

About 3i
3i is a world leader in private equity and venture capital.  We focus on Buyouts, Growth Capital and Venture Capital and invest across Europe, in the United States and in Asia Pacific.  Our competitive advantage comes from our international network and the strength and breadth of our relationships in business.  These underpin the value that we deliver to our portfolio and to our shareholders.

3i's Growth Capital business focuses on investing minority stakes in high growth companies expanding organically or through acquisition.  The business currently manages 300 investments across Europe and Asia with a value in excess of €1.8bn and invests across a broad range of industry sectors, including healthcare, business services, consumer, media, technology and oil, gas and power. 

Recent investments include Nimbus, India, €36m; Boxer, Sweden, €84m; Clinica Baviera, Spain, €40m; Vijai Electricals, India, €20m and Vetoquinol, France, €20m.  Recent exits include CH4 Energy, UK, €225m; Williams Lea, UK, €160m; Gant, Sweden, €241m; Cannon Avent, UK, €450m; AC Hotels, Spain, €45m and Highland Energy, Germany, €178m.