Palatine backs Gusto MBO

PALATINE Private Equity has backed a management buyout of the restaurant chain Gusto from Living Ventures.

The Knutsford-based business has nine sites including, Alderley Edge, Cheadle Hulme, Liverpool and Newcastle.

This year the business achieved sales of £16.4m and employs more than 400 staff. The value of the deal was not disclosed.

Living Ventures Group was founded in 1999 by chief executive Tim Bacon and commercial director Jeremy Roberts. It owns a variety of brands including Blackhouse, Australasia, Artisan and The Alchemist, and recorded sales of £65m in the year to March.
 
Both Bacon and Roberts have invested in the new Gusto business and will stay on as non-executive directors. Gusto’s managing director Sue Crimes and operations director Tony Griffin will join the board, with Palatine’s managing partner, Gary Tipper, and investment director Beth Houghton, completing the team.

Gusto now has plans to launch a new flagship restaurant in Manchester city centre and others will follow in city centre and affluent suburban locations.
 
Sue Crimes said: “Gusto is already a successful brand but I believe this deal will see it become a recognised brand throughout the country.”
 
Gary Tipper, managing partner at Palatine, said: “We’ve been talking to the Living Ventures team for a number of years and we are delighted to be supporting them in this expansion of Gusto. The Gusto team have done an excellent job to date and we look forward to introducing the brand to other parts of the UK.”
 
Tim Bacon, non-executive chairman of Gusto, said: “It will be great to see what has been a very successful brand in the North West finally get its wings and fly. Jeremy and I are very excited to be working with Sue, Gary and the team to take Gusto to a national audience.”
 
Deloitte provided financial advice to Living Ventures. The corporate finance team at BDO in Manchester advised Palatine, led by M&A partner Tim Clarke, Kieran Lawton and James Gregson. The firm also provided due diligence and tax services. Manchester-based Marsh provided insurance due diligence and Quinn Partnership management due diligence. Barclays Bank and Beechbrook Capital provided debt. Shoosmiths was legal adviser to Palatine with Pinsent Mason advising management.

Tim Clarke at BDO said: “The sector has been thoroughly stress-tested during the last five years and Living Ventures has become one of the North West’s biggest success stories. It is deals like this that highlight not only the quality of the region’s restaurants and bars but the appetite from investors for scalable, innovative concepts. Palatine’s investment will bolster Gusto’s growth strategy. They have a great management team in place to drive the business through its next phase of expansion.”

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