The London-based company, which has 89 stores, predominantly in the UK, said the purchase will give it a ‘launchpad’ to expand further into Europe
Tortilla, the burrito chain, has purchased its largest European rival in a near £4million deal, hoping to entice new on-the-go customers before the Paris Olympics.
The London-based company is acquiring 13 Fresh Burritos restaurants situated in prime locations throughout Paris and various other French cities. The sale also includes a network of 19 franchised locations and brand rights.
Tortilla, which presently operates 89 stores mainly based in the UK, expects this deal will act as a “launchpad” for further expansion across Europe. In talking about the company’s plans, it was said: “Tortilla’s international ambitions are no secret, and acquiring Fresh Burritos is our gateway to mainland Europe.”
With Mexican cuisine reportedly growing in popularity, the acquisition of these key locations in France is predicted to solidify Tortilla’s position in the market. It was said that the timing of the purchase is “just in time for the Paris Olympics”. Numerous businesses anticipate benefiting from the influx of spectators who will visit the capital during the Games.
The transaction which cost 3.95 million euro (£3.3million), was financed through a mixture of cash and existing debt facilities, according to Tortilla. Predictions point to a £500,000 decrease in adjusted earnings this year. Nonetheless, it is expected the acquisition will start generating company profits in the region of £500,000 by next year, rising to around £2.5million annually thereafter.
Fresh Burritos reported an annual pre-tax loss of 100,000 euros (£84,500) from overall revenues of nine million euros (£7.6million) last year. Despite the ongoing cost-of-living crisis, Tortilla has reported that its city-centre locations, shopping centres and travel hubs are performing particularly well.
However, the company admitted that trading in quieter regional towns and cities has been more challenging. The firm attributes this success to the enduring popularity of its quick and affordable Mexican-inspired burritos.
