London-based private equity firm Lion Capital acquired a majority stake in the fast-growing UK chain of neighborhood café-bars Loungers from private equity firm Piper PE LLP and management, in a deal which valued the business at £137 million.

Loungers was founded in Bristol in 2002 by a trio of longstanding friends, Alex Reilley, Jake Bishop and Dave Reid.

London-based Piper invested in Loungers in 2012, when the business comprised 20 Lounges and three Cosy Club sites across the UK. After Piper’s investmrent, the firm’s chairman Crispin Tweddel became chairman of Loungers.

Over the past four years, the company has more than quadrupled the number of sites to 94 under the Lounge and Cosy Club brands., opening 20 sites a year since 2014 and creating employment for almost 2,000 people. The company aims to open its 100th site by April 2017 with a further 20 in the pipeline for the following year.

The menu is available all day and offers a wide range of dishes including its famous breakfasts and burgers, an eclectic array of tapas, sandwiches and panini, and a variety of fuller dishes, prepared using great quality fresh produce.

There is an extensive selection of coffee and loose-leaf teas, cakes & pastries, freshly squeezed juice and a great selection of wines, draught beers and cocktails. The interiors are comfortable, inviting and a bit eccentric with a strong use of reclaimed and antique furniture and fittings.

There is also a variety of board games for children and adults, daily newspapers, free Wi-Fi, highchairs and a free neighborhood book swap facility where customers can bring in an old book and swap it for one in our bookcase.

The team behind the business will continue their involvement for the next stage of its growth. Reilley will stay on as chairman of the group. Nick Collins, who joined as finance director in 2012 and became CEO in 2015, will continue to lead the business together with Justin Carter who joined as COO in 2015. Bishop will remain as managing director of Cosy Club.

Lion Capital partner James Cocker said, “We have admired Loungers for several years as one of the most distinctive and scalable foodservice propositions in the UK. Its casual, all-day offering is well-aligned with consumer trends and has been proven to trade successfully in an extraordinarily diverse range of locations. Alex, Jake, Nick and their team have built a first-class business with a wonderful culture. We are tremendously excited to partner with them for the next phase of the company’s development.”

“When we invested in the business we believed Loungers had the potential to fill the gap between pubs and coffee shops and we are proud to have proven that to be the case. There remains enormous scope for growth, with over 500 sites identified in the UK for the Lounge brand alone,” said Piper managing partner Chris Curry.

Reilley, co-founder and chairman of Loungers said: “The Piper team have been absolutely brilliant for Loungers and we’ve enjoyed a wonderful and productive partnership with them over the last five years. It has been a real pleasure and a lot of fun sharing Loungers with Piper, who exit with the business in a truly excellent place. From these strong foundations we look forward to the next phase of growth with Lion Capital, who share our excitement and passion about the future and have the experience to help us continue fulfilling our potential. We have known the Lion team for some time, and their experience in working with Wagamama and other companies in the leisure, food and retail sector will be a huge benefit as we enter the next phase of our expansion.”

Lion Capital is a consumer-focused investor with offices in Los Angeles and London. It has invested more than €6 billion in 30+ businesses and 100+ consumer brands across North America and Europe. The firm was founded in 2004 by Lyndon Lea, Robert Darwent and Neil Richardson, as a spinoff from Hicks Muse Tate & Furst Europe (1999-2004).

Lion’s focus on market-leading consumer-facing companies has led to investments in well-known brands such as Kettle Foods, a leading producer of all-natural snacking products; Perricone MD, a premium anti-aging skincare brand; Jimmy Choo, the luxury shoe and accessories retailer; and All Saints, a leading contemporary fashion brand with a global store network.

Investment bank GCA Altium served as financial advisor to Piper and the founders in connection with the deal. Proskauer Rose LLP served as legal advisor to Lion Capital.



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