Patisserie Valerie Rescued By Irish Fund Causeway Capital Partners
Irish private equity fund Causeway Capital Partners has confirmed that it has agreed terms with administrators to buy British café chain owner Patisserie Holdings for an undisclosed sum.
The deal will be funded with investment from Causeway Capital Partners and the new management of Patisserie, led by CEO Steve Francis, Causeway Capital said in an e-mail.
The company's Patisserie Valerie chain plunged into crisis in October after its owner uncovered accounting irregularities. It hired KPMG as administrators in a last-ditch attempt to save the company, which traces its roots back to a shop founded 93 years ago.
Patisserie will maintain 96 branches across Great Britain and Northern Ireland, Causeway said, adding that 2,000 employees will transfer to a new corporate entity operating the Patisserie Valerie business with their "existing employment rights and benefits honoured".
An End To "A Disruptive Period Of Uncertainty"
"We are delighted to welcome Causeway Capital as our partners in Patisserie Valerie, ending a disruptive period of uncertainty for the business," Francis, a turnaround specialist who took the helm in November, said.
Earlier this week British retail tycoon Mike Ashley's Sports Direct withdrew an offer of more than £15 million to buy Patisserie out of administration, a source told Reuters.
KPMG partner David Costley-Wood had told the company it would need to raise its offer by as much as £2 million pounds, The Financial Times reported at that stage.
Causeway declined to comment on the deal value, while KPMG did not immediately respond to a request for comment.
Hard Work Ahead
"This looks like good news for Patisserie Valerie and its staff, though the jury is still out on how many outlets might actually be saved, as negotiating with landlords may prove tricky," Laith Khalaf, senior analyst at brokerage Hargreaves Lansdown, said in an e-mail.
"The high street is still a tough place to do business right now, and Patisserie Valerie will have to work extra hard because it’s also reeling from the recent accounting scandal," he added.
Patisserie Holdings, whose cafés are best known for their range of cakes, ran around 200 outlets, employing about 2,500 people, and had a stock market value approaching £500 million before it ran into trouble.