Ace restaurateur Riyaz Amlani — the man behind popular fine dine restaurants, delicatessen and bars like Saltwater Grill, Smoke House Deli and Social — has caught the fancy of Louis Vuitton Moet Hennessy, the world’s largest luxury group by revenue.
L Catterton, the firm formed with the 2016 merger of LVMH’s investment arm L Capital and American consumer-focused PE venture Catterton, is looking to buy a controlling stake in Amlani’s company Impresario Entertainment & Hospitality, multiple sources with knowledge of the matter said.
The valuation being considered for the company is around Rs 600 crore and the fund is believed to be currently doing a due diligence of the businesses, they said.
A deal will include a primary infusion of capital to grow the company’s existing brands like Social and Smoke House Deli, as well as a secondary share sale that may see some existing investors reducing their stake or exiting entirely, they said. Though exact quantum of stake that will change hands is not yet final, it is likely to be as high as 60-75%. Amlani is likely to continue as a minority partner with 20-25%.
Since 2001, with a mission to create a great “cafe experience”, Amlani has spread his footprint to 13 cities with over 26 owned and 13 franchised outlets.
Impresario began its journey with Mocha-Coffees & Conversations. Today, Social, a hip “urban hangout,” is fast emerging as the flagship brand, with the all-day cafe and bar format bringing highest revenue and growth for the company.
In fiscal 2017, Impresario posted Rs 225-275 crore of revenue and Rs 25 crore of operating profit, sources said. Each of the large Social properties is generating an average Rs 7-8 crore annually, with a store-level operating margin of around 20%.
“Impresario raised money from an Avendus wealth management arm to fund growth. It has since been trying to find investors but it’s been difficult,” said one of Amlani’s peers, speaking on condition of anonymity. “Fine dining formats do not always give the numbers investors seek.
They have never made profit after tax level profits till date. Amlani is a fantastic innovator of brands and formats but it’s increasingly becoming difficult to sustain.”
However, buyouts by PE funds have not really worked in food services with high capex, faulty business models, excessive experimentation, promoter credibility and a clash between passionate founders and new investors often lead to depressed financial returns and clashes.
