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Writer's pictureAlex Spyrou

Which Investor Has the Largest Appetite for Wingstop? A Bidding War on the Horizon


Wingstop’s UK franchise is up for sale, with a potential valuation of around £400mn. Prospective bidders have until December 16 to submit their final offers.


So, who are the contenders? Currently, four main players are vying for the prize: Domino’s Pizza (the UK arm of the global pizza giant) and three private equity heavyweights - Sixth Street, KKR, and TSG Consumer Partners. For Domino’s, acquiring Wingstop offers a chance to expand its reach within the fast-food industry through horizontal integration. The private equity firms, meanwhile, are likely viewing Wingstop as a high-growth asset to scale and eventually resell. These firms often focus on streamlining operations, optimising supply chains, and expanding brand reach to maximise valuation ahead of a future exit.

 

Wingstop’s rapid growth since its UK launch in 2018 has fuelled investor interest. Founded by Tom Grogan, Saul Lewin, and Herman Sahota - who collectively hold a minority stake - the business now operates 56 UK locations, with 15 of these opening in 2024 alone. The brand has been named the fastest-growing restaurant group in the UK by The Sunday Times 100 for two consecutive years and reported 122% revenue growth in the past 12 months. This remarkable performance has firmly placed Wingstop on the radar of investors since the sale was announced in August.

 

Domino’s appears particularly keen, seeking a second brand to complement its portfolio, as highlighted in its December 2023 Investor Presentation. Wingstop aligns perfectly with the criteria Domino’s has set for growth potential and operational synergy. If successful, Domino’s could leverage its logistics and technology infrastructure to supercharge Wingstop’s expansion while introducing bundled delivery options, creating a compelling value proposition for consumers.

 

Wingstop’s success reflects a broader trend in the UK’s fast-casual dining market, with competitors like Popeyes and Chick-fil-A aggressively expanding. Cultural phenomena like Hot Ones, the celebrity YouTube series that showcases increasingly spicy chicken wings, have further boosted chicken-focused dining’s popularity, especially among younger audiences. Wingstop has effectively tapped into this demographic through collaborations with brands like JD Sports, Footasylum, and Gymshark, as well as through its TikTok-driven marketing strategy.

 

Furthermore, private equity’s enthusiasm for Wingstop mirrors broader post-pandemic trends in the restaurant sector. As consumer confidence rebounds, private equity firms have shown strong interest in high-growth food chains. Recent deals include Apollo Global Management’s £506mn acquisition of Wagamama owner The Restaurant Group in October 2023 and TDR Capital’s majority stake in Popeyes UK in January 2024. Wingstop UK stands out as an attractive target, thanks to its strong brand presence, proven growth, and alignment with consumer trends.

 

What’s Next for Wingstop UK?


Whether Domino’s shifts from dough to drumsticks or a private equity firm adds another feather to its cap, the acquisition of Wingstop UK has significant implications for consumers. A new owner could bring accelerated expansion, opening more locations and potentially enhancing menu and service quality. Domino’s could introduce innovative delivery integrations, such as bundling Wingstop orders with pizza.


Private equity ownership, on the other hand, might focus on rapid scaling and profitability, potentially positioning Wingstop for an IPO or future sale. However, this approach could also involve cost-cutting measures that might impact menu quality or consistency.


With no party yet commenting on the matter, all eyes are on the December 16 deadline to see which bidder secures a golden opportunity in the fast-growing UK chicken dining market.

 

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