3i, an international investor, today announces that it has sold its 36.8% stake in Giraffe to Tesco. The enterprise value of the transaction is £48.6m. 3i originally invested £10m in Giraffe in 2006, with today’s sale representing a 1.6x money multiple on that investment.

3i initially invested in Giraffe in October 2006, alongside existing investor Risk Capital Partners, to support management’s plans for a more rapid roll-out across the UK.  3i’s investment enabled founders Russel and Juliette Joffe and Andrew Jacobs to expand their unique brand of global food and family-friendly service from its London high street base to a nationwide presence.

During 3i’s investment period, the business has grown from 11 to 48 sites.  These include the core Giraffe restaurant chain in high streets, shopping malls and leisure developments, the burgeoning Giraffe Burgers & Cocktails brand and 7 sites in transport hubs, including Giraffe Stop! at London Kings Cross train terminal, 5 UK airport franchises and the first overseas site, which opened in January 2013 in Dubai’s new airport terminal.

3i has played a key role in Giraffe’s growth, including introducing Stuart Rose (with previous roll-out experience as deputy chairman of Body Shop International and chairman of Agent Provocateur) as non-executive director, alongside existing chairman and successful restaurant entrepreneur Luke Johnson.  3i has also helped Giraffe to access improved debt facilities to support the roll-out, build its management infrastructure to run a much larger estate and improve its portfolio analysis and returns.

Justin Maltz, 3i Director, commented: “We saw the potential early on for Russel and his team to take their successful London high street concept and expand it across both geography and location types.  This investment has been a great example of 3i’s ability to back entrepreneurs to significantly scale up their business, by providing growth capital alongside the founders via a minority equity stake.

It has been great fun working with management and the board to create a distinctive and scalable brand, bringing the unique Giraffe hospitality to customers across the UK - and now internationally.  We know the team remains ambitious to further grow the business under Tesco’s ownership and we look forward to their continued success.”

Russel Joffe, MD Giraffe, commented: "3i’s investment has enabled Giraffe to significantly expand its presence, both geographically and across a variety of locations. In addition, their input in areas such as banking, management capabilities and estate analysis has been highly valuable.  As we move into our next phase of development, we see Tesco as a complementary partner to support our future growth plans.”

The shareholders of Giraffe were advised on the sale by Sean Williams of PwC.

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For further information, contact:

3i
Laurie Yeh    Tel: +44 20 7975 3126
Email: laurie.yeh@3i.com

Notes to editors:

About 3i Group
3i is a leading international investor focused on mid-market private equity, infrastructure and debt management across Europe, Asia and the Americas. For further information, please visit www.3i.com.

Regulatory information

This transaction involved a recommendation of 3i Investments plc.