Tortilla, the fast-casual Mexican restaurant group in the UK, has acquired Chilango for a total consideration of up to £2.75 million from investment firm RDCP Group Ltd.
Chilango is an award-winning fast-casual restaurant chain specialising in Mexican food including burritos, salads and tacos. The business operates from an estate of eight premium location UK sites, which offer both eat-in and take away options, as well as through its delivery channel supported by delivery kitchens.
The acquisition accelerates Tortilla’s expansion across the UK. The group plans to open 45 sites over the next five years. The acquired Chilango sites are additional to the target of 45.
The acquisition also adds a complementary, premium brand to the group, enabling Tortilla to capitalise on the popularity of the Chilango brand and the widespread growing demand amongst consumers for fast-growing sector trends including healthy eating, convenience and ethnic and customisable cuisine.
As a result of the two companies’ similar product propositions, the group has identified several synergy opportunities, including but not limited to leveraging the group’s favourable buying power and 5,500 sq ft central production kitchen in Tottenham Hale.
Tortilla intends to retain and continue to operate the Chilango brand at certain locations and via the delivery channel in a number of Tortilla sites.
For the 52-week period to 26 December 2021, Chilango delivered revenue of £7.3 million and loss before tax of £0.2 million.
Richard Morris, CEO of Tortilla, said: “We are delighted to announce Tortilla’s acquisition of Chilango.
“Chilango is a highly complementary brand that, similarly to Tortilla, provides a fantastic value-for-money proposition and embraces popular and growing sector trends for healthy, customisable food from an estate of restaurants situated in premium locations in London and Manchester.
“This acquisition accelerates our ambitious plans to further expand the Tortilla brand and these sites are in addition to our initial target of opening 45 UK restaurants over the next five years, helping us to surpass this target. It also adds another brand to the Tortilla Group, enabling us to further strengthen our leading position in the UK’s fast-casual dining market.
“We’re very excited about this acquisition and look forward to leveraging our combined knowledge and expertise within the Mexican fast casual dining sector.”
Sameer Rizvi, chairman of Chilango and founder/CEO of RDCP Group, said: “When we acquired Chilango in August 2020, the business and the sector were facing significant headwinds. However, Richard Franks, his management team and the board members, including Iryna Dubylovska and Wagamama COO Nigel Sherwood, worked to stabilise the business, agree good deals with landlords and manage the supply chain.
“Chilango took advantage of the growing delivery market, which allowed the business to grow quickly and stay profitable even during national lockdowns. Today, the business has been successfully turned around and is ready for its next stage of growth. Tortilla are the strongest operators in this space and the perfect strategic fit for Chilango.
“I would like to take this opportunity to thank Richard Franks and the whole Chilango team as well as our loyal guests who have helped to develop the business into the established and popular brand it is today, and I look forward to seeing Chilango enter the next phase of its journey as a much-loved brand under Tortilla’s ownership.”