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So inspired by rumours that Pizza Express might fold (arf arf), I've done some digging into Pizza Express's corporate history.
And it's a FASCINATING story of how solid businesses get crippled by debt to make a few people rich.
And it's a FASCINATING story of how solid businesses get crippled by debt to make a few people rich.
Pizza Express was a mainly London-focused restaurant business until 1992.
When a pair of entrepreneurs called Luke Johnson and Hugh Osmond bought it for £15m.
(N.B. it's been in & out of so many hands it's v hard to find hard number sources.)
http://news.bbc.co.uk/1/hi/business/2396323.stm
When a pair of entrepreneurs called Luke Johnson and Hugh Osmond bought it for £15m.
(N.B. it's been in & out of so many hands it's v hard to find hard number sources.)
http://news.bbc.co.uk/1/hi/business/2396323.stm
If Luke Johnson & Hugh Osmond sound familiar then that's because...
Luke Johnson is the private equity genius who presided over Patisserie Valerie (we all know how that turned out.) https://www.theguardian.com/business/2019/jun/09/patisserie-valerie-luke-johnson-says-he-was-tricked
Luke Johnson is the private equity genius who presided over Patisserie Valerie (we all know how that turned out.) https://www.theguardian.com/business/2019/jun/09/patisserie-valerie-luke-johnson-says-he-was-tricked
Hugh Osmond parted with Johnson in 1997 to found Punch Taverns.
He was also a private equity genius for a hot minute.
Then it emerged he'd run up £3bn in debt and the pubs got sold to Heineken for £403m https://www.theguardian.com/business/2011/mar/27/punch-taverns-debts-restructure
He was also a private equity genius for a hot minute.
Then it emerged he'd run up £3bn in debt and the pubs got sold to Heineken for £403m https://www.theguardian.com/business/2011/mar/27/punch-taverns-debts-restructure
And what happened to Peter Boizot, the man who founded Pizza Express & exited the company with a reported £33m?
He spent it all on art, a hotel and trying to make Peterborough United a thing. His estate was £0 after probate when he died in 2018. https://www.msn.com/en-gb/money/personalfinance/how-the-%C2%A333m-pizza-express-founder-lost-all-his-dough-businessman-who-started-selling-pizza-for-two-shillings-a-slice-died-almost-penniless-after-trying-to-save-ailing-local-football-club/ar-AAIqtNL?li=AAnZ9Ug
He spent it all on art, a hotel and trying to make Peterborough United a thing. His estate was £0 after probate when he died in 2018. https://www.msn.com/en-gb/money/personalfinance/how-the-%C2%A333m-pizza-express-founder-lost-all-his-dough-businessman-who-started-selling-pizza-for-two-shillings-a-slice-died-almost-penniless-after-trying-to-save-ailing-local-football-club/ar-AAIqtNL?li=AAnZ9Ug
But how did Johnson & Osman engineer a £15m transaction into a company that later traded for 100s of millions?
With a reverse takeover.
This means they took over a shell company called Star Computing (wtf?!) and became a PLC without an IPO. https://www.independent.co.uk/news/business/pizza-express-on-way-to-market-1480080.html
With a reverse takeover.
This means they took over a shell company called Star Computing (wtf?!) and became a PLC without an IPO. https://www.independent.co.uk/news/business/pizza-express-on-way-to-market-1480080.html
SIDENOTE...
In 1992, Pizza Express was trading at a pre-tax loss of £0.5m inc some property writedowns (back then we were coming out of a horrible property correction).
Pizza Express is a restaurant business, and restaurant businesses are VOLATILE.
In 1992, Pizza Express was trading at a pre-tax loss of £0.5m inc some property writedowns (back then we were coming out of a horrible property correction).
Pizza Express is a restaurant business, and restaurant businesses are VOLATILE.
But why do a reverse takeover?
Well, publicly listed companies have an advantage over private companies in one key respect.
They can access a wider range of 'alternative financing options'.
Which means they can accumulate more debt.
Well, publicly listed companies have an advantage over private companies in one key respect.
They can access a wider range of 'alternative financing options'.
Which means they can accumulate more debt.
Pizza Express was a PLC for 10 years and grew significantly in footprint & ambition but the group's profits were never staggering.
It made £20m in 2002, and sales grew by a disappointing 3% https://www.theguardian.com/business/2002/feb/12/5
It made £20m in 2002, and sales grew by a disappointing 3% https://www.theguardian.com/business/2002/feb/12/5
