Conversion Venture Capital (CVC2) has snapped up an 80% stake in Wagamama’s US operations, with restaurateurs Robert Cornog Jnr and Richard Flaherty brought in as operating partners.
Wagamama’s UK parent, The Restaurant Group, will retain the remaining 20% of the business following the creation of a joint venture.
TRG launched a strategic review last year of how best to develop the pan-Asian chain’s US business, given the well-known challenges of developing it as a fully-owned business from the UK.
Over the course of the last six months it identified and met with a number of potential development partners before entering into a JV with CVC2 as financial partners and Cornog Jnr and Flaherty as operating partners.
“Rob and Richard are two experienced US restaurant leaders who share our vision for Wagamama and have the financial support from Conversion Venture Capital, an investment firm that focuses on partnering with entrepreneurs and management teams that value flexible capital,” said TRG in a statement.
The duo have a wealth of experience in the hospitality segment, including most recently as senior leaders of restaurant concept Punch Bowl Social.
The JV will provide Wagamama’s US operations with local operational expertise and expansionary capital with the aim to further expand the brand in the country.
The JV board will decide the precise scale of the expansion plans but TRG expects between 30 and 40 restaurants to be opened over the first five to six years of the JV.
TRG retains the option to repurchase the remaining 80% of the business starting in 2026.
The JV therefore provides it with a capital efficient means for expanding the business in the US, while at the same time minimising losses in the near-term.