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Barclays Private Equity backs the £23.5 million MBO of Gaucho Grill

18 Jan 2005

Barclays Private Equity has added to its consumer brands portfolio by backing the £23.5 million management buy out of restaurant operator, Gaucho Grill. Gaucho Grill has seven restaurants in the UK, one in Amsterdam and a franchise business in the Middle East. The business also owns Destino, a restaurant bar and nightclub in London. Barclays Private Equity has taken a 47 per cent stake in the business with the remainder held by management.  

Founded by Zeev Godik in 1976, the Gaucho Grill is renowned for its high quality Argentinian beef - considered to be among the best in the world. The menu also features Latin classics such as black bean soup, Arroz Con Mariscos (seafood rice), grilled Escolar (butterfish), Argentine pancake with dulce de leche and a selection of fine cheeses. Gaucho Grill also boasts the largest selection of Argentinian wines in the UK, including the Terruno selection – a group of wines produced exclusively for Gaucho Grill in Argentina with assistance from some of the best wine makers in the world.  

Destino, launched just over a year ago, is synonymous with every element of Latin American hospitality. It is housed in a three-storey ‘hacienda’ style venue on Swallow Street, Piccadilly, which has hand painted tiles originally donated by the King of Spain in 1929. The menu is a Latin ‘grazing experience’ incorporating eclectic dishes from Cuba and Ecuador to Chile and Argentina accompanied by heady cocktails and one of the most comprehensive Latin wine lists in Europe.  

Zeev Godik, CEO and founder of Gaucho Grill said: “The Argentinian theme of the Gaucho Grill is very distinctive and has been a huge pull for the last 28 years. Competition is fierce so we constantly strive to improve the ambiance, authenticity and quality of the restaurants. With the help of Barclays Private Equity we intend to build on our success through a measured roll out of one to two further Gaucho Grill restaurants per year, without compromising on the high quality that our customers have come to expect”.  

The first UK Gaucho Grill opened over ten years ago in Piccadilly. The success of its simple but well executed offering has helped it to grow to seven restaurants in the UK, 6 in the London area and one in Manchester. In 2004 the business generated EBITDA of £3.4m. In recent years Gaucho Grill has substantially out-performed the market with like for like sales growth of 27 per cent in 2003 and 26 per cent in 2004. According to Mintel market figures the UK restaurant market is growing a circa 4.5 per cent per annum. As Gaucho Grill is at the premium end of the market the investment team expect it to continue to show a higher than average level of growth.  

The MBO is led by CEO Zeev Godick, who founded the business in 1976. Other members of the management team include: Donald Storey, Operations Director UK, and Simon Coulthard, Finance Director.  

Anton Wellenreiter and Dominic Geer led the investment for Barclays Private Equity. Debt funding was provided by Royal Bank of Scotland.  

Barclays Private Equity was advised by New World Corporate Finance. BDO Stoy Hayward undertook financial due diligence, and Addleshaw Goddard provided legal support.

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