TGI Fridays enterprise value 177 mln pounds with deal (Il Sole 24 Ore Radiocor) - London, 16 Apr - The UK hospitality group Hostmore said that it has reached a non-binding agreement for an all-share acquisition of TGI Fridays.

The deal would in Hostmore shareholders holding a 36% shareholding in the enlarged business upon completion, with TGI Fridays shareholders owning the remaining 64%.

It noted that the proposed transaction is being negotiated on an exclusive basis and is subject to, among other things, completion of confirmatory due diligence and the parties entering into binding transaction documentation. The deal would be a reverse takeover.

TGI Fridays is expected to be purchased for an enterprise value of 177 million pounds, or approximately 5.4x TGI Fridays' FY23 underlying EBITDA, Hostmore said.

The combined group would have had underlying fiscal 2023 revenue of approximately 490 million pounds, an approximately 9% EBITDA margin, and a free cash flow of more than 30 million pounds, it added.

"Similar London and internationally listed franchisor businesses currently trade at an enterprise valuation multiple averaging 14x EBITDA, representing a significant re-rating opportunity for Hostmore shareholders," according to Hostmore.

The combined group is expected to be named TGI Fridays, it added.

The transaction is expected to complete by the end of the the third quarter of 2024, it noted.

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