Pret a Manger was finally gobbled up by the private equity firm Bridgepoint yesterday in a deal which valued the 200-strong sandwich chain at £345m including debt.
The co-founders Julian Metcalfe and Sinclair Beecham have made £50m from the deal, but are reinvesting much of it in the business in their attemptto transform Pret into a global brand.
The fast-food giantMcDonald's, which bought 33 per cent of Pret in 2001, has sold its stake for an undisclosed sum, while the investment bank Goldman Sachs, which advised on the deal, has taken a minority stake, believed to be around 20 per cent.
Mr Metcalfe, who is still involved creatively in the business, which prides itself on using natural, preservative-free ingredients for its sandwiches, all made in store, said: "This is an exciting time for all of us at Pret. Bridgepoint shares our vision, understands our culture and will support our roll-out plan globally, while maintaining everything that makes Pret work for our customers and staff."
The management team headed by the chairman, Larry Billet, and chief executive, Clive Schlee, are to stay with the business, and along with the co-founders will have a combined 25 per cent stake.
Pret was put up for sale almost a year ago with an estimated enterprise value of £450m after the management considered a float. But the credit crunch struck, holding up the process. Bridgepoint, which has secured debt funding from Rabobank estimated to be worth £175m, managed to beat competition from rival bidders, including Advent International and Morgan Stanley Private Equity. The firm has been following Pret's fortunes for some time, and first attempted to buy it in 2001.
Guy Weldon, a partner at Bridgepoint, said Pret has "many unique selling points that position it well to capitalise on food and consumer lifestyle changes driven by the trend for premium healthy eating".
Pret's creators met while studying property law at the Polytechnic of Central London (now the University of Westminster), and opened their first Pret in Victoria in central London in 1986, with a £17,000 loan. Tired of the soggy sandwiches on offer at local cafés, the pair decided to use preservative-free, chemical-free food, and offer such adventurous delights as brie, tomato and basil baguettes. Though another store didn't open for three years, in the 1990s Pret caught the mood as busy office workers looked for healthier lunch options.
As part of its caring ethos, Pret offers food to homeless charities at the end of each day rather than keep it over. Eyebrows were therefore raised when McDonald's, for many the opposite of what Pret appeared to be trying to achieve, bought its stake in 2001.
Pret currently operates from 175 UK shops, 14 in the US and 11 in Hong Kong, and employs almost 4,000. Sales hit £223m last year, up from £194m in 2006.
With new investment in place Pret expects to develop itself as a global brand, taking its crayfish andavocado sandwiches and free-range egg mayo and roasted tomato breakfast baguettes around the world.
It expects to open at least 30 new stores this year, including seven in New York, and aims to expand by 15 per cent in terms of unit numbers per year.
The branding expert Jonathan Gabay, of Brand Forensics, said: "The strategy of owning a 'good fast food' store on the corner of most major high streets is a mouth-watering, popular proposition for any organisation such as Bridgepoint looking to offer more than just a coffee break."
Bridgepoint's portfolio includes Pets at Home, Fat Face, Molton Brown and Virgin Active.Reuse content