Spice PE backs LEON Restaurants with $32.4m investment

Spice Private Equity has agreed to pay £25 million ($32.4 million; €28.9 million) to acquire a minority stake in LEON Restaurants, a UK-based quick service chain that prides itself on healthy and sustainably-sourced ingredients.

The investment is Spice’s first since revising its investment strategy in July 2016 to focus on direct investments, and it will help LEON pursue a global expansion beyond the UK and its two outposts in the Netherlands, according to a statement from Spice.

“LEON is a disruptive fast-food model that was born in the UK but has an immense potential to become global,” said Fersen Lambranho, member of Spice’s board and chairman of GP Investments, its controlling shareholder and manager of Spice.

“With the transaction, we expect Spice to become the largest shareholder of LEON and to benefit from relevant governance within the company, working in partnership with the CEO and Co-founder, John Vincent and Active, a long standing investor in the business.”

Spice Private Equity, which is listed on the SIX Swiss Exchange, aims to achieve long-term capital growth by investing directly in companies and private equity specialized funds, as well as private equity-related instruments and certain credit products, a spokesman confirmed to Agri Investor. 

LEON positions itself as a healthy alternative to fast food chains and adheres to various sourcing and sustainability guidelines touching on environmental, social and governance principles. 

Lambranho noted that LEON presents a similar opportunity to a former investment in Fogo de Chão, a Brazilian steakhouse that expanded into the US and is now listed on the NASDAQ.

In the recent disclosure of its 2016 results, LEON announced that the company’s net asset value grew by 8.1 percent to $42.28 per share as of December 31.

The firm attributed the gains to two main factors: a reversal of “derivative financial liability” following GP Investments’ purchase of the company shares held by Fortress Investment Group; and the positive performance of the remaining portfolio, which was positive by $4.8 million and added to $3.4 million of realized returns from distributions and asset sale.

On LEON’s website, the company noted that co-founder John Vincent “used to lie on his back and wave his arms and legs in the air with excitement before his once-a-term visit to McDonald’s. But then we grew up, and realized that most fast food makes you fall asleep and wake up fat.”