Megan’s appoints advisors to consider ‘strategic options’ for growth

Neighbourhood restaurant group Megan’s has appointed advisors to explore options for "significant further expansion”.

 

The independently owned business opened its first site in London’s Chelsea in 2002 and now has an estate of 20 restaurants predominantly in south and Greater London, including in Surbiton, Dulwich and Clapham.

 

Over the past three years, Megan’s has opened 10 sites, with its 21st restaurant due to open in Weybridge this summer. Three additional sites are expected to launch over the next 12 months.

 

The shareholders of the Mediterranean-inspired all-day diner have brought sector specialist M&A advisor Tamweel into the business as it considers how to finance future growth.

 

Up until now, the restaurant group has funded expansion from cash flow and “modest levels of debt”.

 

A Megan’s site costs roughly £625,000 per fit-out and runs on “low operating expenses”, according to the group.

 

Since the year ended March 2020, the business has achieved compound annual revenue growth of 32%.

 

Rod McKie, non-executive chair at Megan’s, said: “Now that we’ve reached a key milestone of more than 20 sites, it’s an appropriate time in our journey to be considering our strategic options.

 

“In recent years, we have demonstrated that Megan’s is able to successfully operate from a variety of locations, such as prime London sites in Battersea Power Station, Clapham and Kensington, London suburbs such as Surbiton and Kingston to smaller cities and towns such as St Albans, Marlow and Welwyn Garden City. This highlights what we’ve always believed, that Megan’s has huge consumer appeal and growth potential. With market conditions improving, now is the right time for us to explore whether we go through the next chapter alongside a strategic or financial partner, or whether we continue to grow independently.”

 

Ali Aneizi, founder of Tamweel Capital, who recently joined Comptoir Group as non-executive director, added: “Megan’s is a standout, high growth, next generation hospitality brand. Being a truly all day, all evening trader combined with its industry leading conversion gives it real scarcity value. Whilst the deal doing climate remains challenging, for the right format, with the right KPIs, there continues to be interest from discerning buyers and investors.”

 

Tamweel has advised brands such as JKS, Farmer J, Inception Group and Swingers in completing deals with investors such as McWin, Phoenix and Cain International.

 

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