PE deal values McDonald's franchisee at Rs 5,187 crore

Funds generated to be used for investments in expansion of business

Singapore-based investment firm Arisaig Partners, which bets on consumer-driven companies, would pick up a 3.5 per cent stake in McDonald's franchisee, Westlife Development, for Rs 180 crore, it was announced on Tuesday.

Westlife subsidiary Hardcastle Restaurants runs the operations of McDonald's in the west and south of India. Operations in the north and east are run by another franchisee named Connaught Plaza Restaurants.

Arisaig would pick up the stake in Westlife via a preferential allotment of 5.4 million shares, which would be made available to it at Rs 333.1 a piece. The deal values the firm at Rs 5,187 crore.

Following the preferential  allotment, the Jatias, promoters of Westlife, would hold 64.1 per cent in the company.

“The funds raised through the preferential allotment would be used to invest in the growth of our business, aggressively increase our retail footprint, fortify our presence in the existing markets and enable us to enter newer markets,” said Amit Jatia, vice-chairman, Westlife Development.

Westlife has 166 restaurants at the moment, with plans to double this number in the next two years.

Westlife would join a list of marquee names such as Trent, United Breweries, Future Retail, Marico, Godrej Consumer and Jubilant FoodWorks, master franchisee of Domino’s in India, Britannia and Shopper's Stop, who are already on Arisaig's investee company list. Some Indian subsidiaries of multinational companies who are on Arisaig's rolls include Nestle, GlaxoSmithKline Consumer and Colgate-Palmolive.

Arisaig's move comes at a time when Westlife has just received approval from the high court here for consolidation of its subsidiaries with it. Initiated last year, the approval would make Hardcastle a direct subsidiary of it.

The stock of Westlife was up two per cent on the Bombay Stock Exchange on Tuesday, to close trade at Rs 328.5. This was also its day’s high.
A SMALL CHUNK OF THE BURGER

• 3.47% Stake in Westlife Development that Singapore-based Arisaig Partners will pick up
• Rs 180 crore The cost to Arisaig Partners
• Rs 333.05 Value of each share
• Rs 5, 187 The total value of Westlife Development as per the deal
• 166 Total no of restaurants Westlife Development runs