Urban snaps up Tootsies for £31m

Urban dining, a cash shell set up by former PizzaExpress directors to acquire and run restaurant groups, announced yesterday it had bought the 23-strong Tootsies chain for £31m.

Urban dining, a cash shell set up by former PizzaExpress directors to acquire and run restaurant groups, announced yesterday it had bought the 23-strong Tootsies chain for £31m.

Urban, chaired byGlen Tomlinson, the former finance director of PizzaExpress, has pledged to speed up Tootsies' expansion plans. A new restaurant is set to open next month, with 10 more in the pipeline.

John Metcalf, the chief executive of Urban, who was group operations director for PizzaExpress, said: "This deal marks the first of the acquisitions we promised when we launched Urban Dining on the market in May. We will be debt-free after the placing and intend to use the cash generated by the business to accelerate the roll-out of the Tootsies format."

Urban raised most of the financing for the deal through a £29.4m share placing at 60p a share. It is paying £30.6m in cash for the group, which specialises in burgers, as well as 1.17 million newly issued shares.

The first Tootsies restaurant opened in Notting Hill, west London, in the early 1970s. In 1999, after growing to nine restaurants, the business was sold to a management team led by Andrew Bonnell, with the help of Phoenix Equity Partners and Piper Trust, the venture capital houses. Mr Bonnell will join the board of Urban after the acquisition, and will reinvest half his £1.2m stake in Tootsies in Urban shares.

Mr Metcalf said Urban was "actively pursuing" its next acquisition. The group also announced its results for the past seven months, reporting an operating loss of £47,000. Its shares rose 2p to 62.5p yesterday, giving Urban a market capitalisation of £4.62m.