North West, 3 April 2012 - BGF, established to help the UK’s fast growing smaller and medium sized businesses, today announced its first investment in the North West, with a £3.25 million investment in award-winning Mexican street food chain, Barburrito.
This is BGF’s fifth deal in three months, making it currently one of the most active investors of long-term growth capital in the UK and bringing its total investment in fast growing companies to £37 million to date.
Founded in 2005 by Manchester based entrepreneurs, Morgan Davies and Paul Kilpatrick, award-winning Barburrito is a chain of fast-casual Mexican restaurants that offer healthy food to eat in or take away. Having started as a single unit in Manchester and the UK’s first ever burrito bar, the business now operates from six sites in Manchester, Liverpool and Leeds and employs over 100 people.
Net revenues for FY 2012 hit £4 million and like-for-like net sales are up 20% on last year. Over the last two years the business has invested heavily in operations, branding and its supply chain to enable rapid expansion. Barburrito’s rapidly growing popularity with consumers is due to it consistency in serving fast, fresh and healthy Mexican food.
BGF’s £3.25 million equity investment will fund an active rollout programme with the business planning to triple its number of restaurants to c18 sites over the next four years. The bulk of the new restaurants will be in prime locations
in London. As a result of this expansion, Barburrito expects to create approximately 250 new jobs.
Mexican food is one of the fastest growing sectors in the restaurant industry at present. In particular, burritos bars are taking off and are expected to be the growth sector of the industry over the next 3 years.
Davies and Kilpatrick were the first people to open a burrito bar in the UK. Prior to founding Barburrito, they successfully developed and sold an upmarket single site multi cuisine takeaway business, Globe Delivery. In 2009, they teamed up with industry veteran Richard O Sullivan, the co-founder of Millie's Cookies, who has supported the rapid growth of the business as non-executive chairman.
Following BGF’s investment, Colin Hughes will join the board as a non-executive director, bringing additional experience in the food retail sector. Hughes was previously on the boards of Pret a Manger and EAT, where he was involved in rolling out 100 new sites.
“Barburrito has a fantastic product, a strong vibrant brand, ambitious management and an excellent operational platform. These are strong foundations for growth and the basis for our decision to invest.
“Having established the UK’s first ever burrito bar, Morgan and Paul have successfully pioneered fresh Mexican food in the UK and it is fast becoming one of the most popular parts of the food and drink market. The business has demonstrated strong trading in the North West and is now well placed to bring its winning formula to the London market. This is where our capital and expertise comes in and we look forward to working with the team as we move into their next stage of growth.
“This is the first investment led by our Manchester office and as such represents a significant landmark for BGF. We are seeing a strong pipeline of investment opportunities across the North of England, a clear indication that businesses here are recognising the value that a supportive equity investor can bring to the table.“
“We have made great progress since starting as a single site in 2005. In the last two years we have opened three new stores and doubled the size of the business. We believe that the time is right to roll out our award winning formula to a national customer base and we knew that we needed additional funding to achieve this.
We are excited about partnering with BGF to take Barburrito to the masses. It was important for us to find the right partner, an investor that is able to offer more than just money. BGF has demonstrated that they not only share our enthusiasm for the sector but can bring valuable advice, expertise and high level contacts to the table.”
“Our first burrito bar was opened in the UK in Piccadilly Gardens, Manchester and we have since opened a further five stores in the North West of England. We have a proven concept, an excellent product and a strong brand. BGF’s capital will help support our expansion into London and the rest of the UK. We are hugely excited about the opportunities that lie ahead for us in this rapidly growing sector.
“BGF’s investment will allow us to expand into the London market and create approximately 250 new jobs. We are actively looking for high density locations, populated by office workers, shoppers, tourists and students with a busy lunch and some weekend trade.”
The business will be assisted by Ward Griffiths Associates to identify and select sites for the expansion programme. Barburrito was introduced to BGF by Corporate Finance and Investment business Seneca Partners. Legal advisers to BGF were Pinsent Masons and financial due diligence was undertaken by Grant Thornton. Existing shareholders were advised by Freeth Cartwright LLP and Hill Dickinson.
Barburitto has won a number of prestigious awards since launching, including the ‘BBC Best Newcomer Award’ at the Manchester Food & Drink Festival and ‘Best Quick Bite’ at The Metro Food & Drink Awards.
Barburrito combines the speed of service and value of traditional fast food operations with the quality and freshness of food associated with casual dining venues.
Davies and Kilpatrick have both received a number of entrepreneurial awards, including Insider’s prestigious ‘42 under 42’ and Crain’s ’40 Under 40’, in addition to being shortlisted for the HSBC Start-Up Stars Awards.
Barburrito was named as “Best Casual Dining Venue for its Piccadilly branch in Manchester Food & Drink Festival 2010 and “Best Fast Food Outlet” at the Trafford Centre Awards 2010.
Barburrito currently operates at:
Piccadilly Gardens, Manchester
The Orient, Trafford Centre
The Foodcourt, Trafford Centre
The Headrow, Leeds
The Galleria, Liverpool One