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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Restaurant Group - To buy Wagamama

December 2018

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • RTN
  • Price:
  • 259p
Restaurant Group has surprised investors with the transformational acquisition of sushi chain Wagamama from private equity group Duke Street for £357m cash and the assumption of £202m debt. The deal represents an enterprise value of £559m and will be funded by a £315m rights plus a new loan of £220m. That dwarfs current long-term borrowings of £29.3m.Wagamama made estimated EBITDA of £42.5m on an annualised basis for the 12 months ended August ’18 but RTN expects synergies of £22m. Adding them together would reduce the EBITDA multiple to a reasonable 8.7x.Duke Street paid £215m for Wagamama in 2011 and the latter boasts a strong record. Currently operating from 196 d ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

All material on this website is protected by copyright. You may use Information retrieved from the www.scsw.co.uk website for your own personal non-commercial use which means that you may not sell or copy this information to any third party without prior written consent. ISSN 1358-183X

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