North East restaurateur buys Smollensky’s in £10 million deal
12 October 2007
North East restaurant business Shire Group has bought London restaurant chain Smollensky’s in a £10 million deal with funding from Alliance & Leicester Commercial Bank and Octopus Private Equity.
The deal will more than double Shire’s size and more than treble the turnover of Corbridge-based Shire Group. Shire already operates the Pastiche and Le Frog restaurant chains and the outright acquisition of Smollensky’s will see the company significantly expand the business and increase turnover to around £14 million.
Paul Lilley, Managing Director of The Shire Group, said: “The acquisition of the Smollensky’s group of restaurants is an important milestone in our buy and build strategy. The deal gives us more outlets in the south with nine London restaurants, including the Strand and Canary Wharf to add to those we already have in the Midlands and North West. The Smollensky’s chain adds an established, well respected brand to our portfolio and will significantly develop the Group’s presence in the south of England.
“The brand is associated with a high quality bistro experience. The strong management, excellent service and discipline we have brought to our other restaurant businesses will ensure the established name will continue to thrive in a new era of ever increasing competition.”
Commercial law firm Muckle LLP advised on the deal with McInnes Corporate Finance and RHK, with finance provided by Alliance & Leicester Commercial Bank’s Tyne & Wear Business Centre and Octopus Private Equity.
Neil Williams, Head of Alliance & Leicester Commercial Bank’s Tyne & Wear Business Centre said: “This is an exciting opportunity for Paul Lilley and great news for the Region. The Smollensky’s deal was a very complicated transaction. Speed and flexibility were essential to secure the deal, as timescales were very stretching for all concerned. Paul has a strong track record in this sector and has the experience and drive to make his mark on the Smollensky’s brand and maximize its potential.”
The team at Alliance & Leicester Commercial Bank worked closely with Paul to ensure the process ran smoothly and worked through the night to ensure that the deadline was met. In addition, the bank’s expertise in handling cash and merchant services will enable Paul to continue to save the business money going forward.
Richard Taylor of Octopus Private Equity said: “This was a complex transaction and one that was completed within a short timetable, but we are delighted to be backing such a strong management team. Paul and the team have an excellent track record within the restaurant industry and we are looking forward to working with them very much.”
Paul Lilley set up The Shire Group in 2005. Since then the Group has acquired the Midlands based, Pastiche Bistro chain and the Le Frog Bistro chain in the North West. In addition, Paul has bought three Burger Shacks as part of the Groups expansion in the south, with plans to open a further 12 Burger Shacks and expand the Smollensky chain to accommodate three more bar and grills in London, Canary Wharf and the West End.
Already employing 450 people, Paul plans to open a further 20 restaurants over the next few years as he continues to develop and expand the business.
Paul Lilley continues: “The Smollensky’s deal was a key part of my expansion plans for the Shire Group and therefore it was essential that the deal completed on time. The timescales were very short and the team at Alliance & Leicester, Muckle LLP, McInnes and RHK’s pulled out all the stops to ensure the process ran smoothly.”
