Tortilla announces acquisition of Fresh Burritos

Tortilla Mexican Grill plc, the largest fast-casual Mexican restaurant group in Europe, has announced its strategic acquisition of Fresh Burritos, the second largest fast-casual Mexican restaurant group in Europe, and largest in France, for a total consideration of €3.95 million.

This acquisition is the latest step forward in Tortilla’s ambitious ‘Vital Five’ growth strategy, of which key pillars are to develop the brand internationally and double-down on franchise.

Key highlights

The acquisition includes 13 company-owned leasehold restuarants in high-quality locations in Paris and other major French cities. As well as rights to the Fresh Burritos brand and network of 19 franchised locations.

It will also provide Torilla with the springboard for franchise growth across Europe.

The deal also includes the introduction of a French Central Production Kitchen, as well as wider buying power, operational and marketing efficiencies.

The deal of €3.95m, consists of a cash payment of €2.71m and a bank debt roll over of €1.24m. The cash payment has been funded from Tortilla’s existing committed financial facilities with net debt remaining well within the Group’s covenant headroom ensuring flexibility to continue to fund its plans.

Tortilla currently operates 89 sites across the UK and in the Middle East. With Fresh Burritos portfolio, it will now gain a strong footprint into Europe, via high-quality sites that will be rebranded to Tortilla. 

The Global Mexican food market is expected to grow by 6.65% ($114bn) between 2022 and 2026, with 42% of growth expected to come from outside of the North American market and mainly in developed European countries. 

The European QSR market is estimated to grow with 3.7% CAGR (+$45bn) during 2023-2030 to $192bn, of which the Mexican food segment is growing considerably with no large burrito food chains currently servicing the market. The acquisition of Fresh Burritos offers Tortilla a strategic platform in the fast-growing French market.

'Raring to go'

Andy Naylor, chief executive of Tortilla, commented: “Tortilla's international ambitions are no secret, and acquiring Fresh Burritos is our gateway to mainland Europe. With Mexican cuisine surging in popularity, these prime French locations give us a solid launchpad. We're set to leverage this acquisiton, just in time for the Paris Olympics!

"We've assembled a top-tier European team, with Francesca and Gilles at the helm, to navigate this new market. The brand synergies are clear, a new central kitchen is in the works, and our dedicated team is raring to go. We're primed for sustainable growth abroad!”

The acquisition is conditional on certain procedural items. Completion will take place on 1 July 2024. Tortilla will provide a market update on its first-half of 2024 performance in July.

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