Quadrant Private Equity will be closely watched in the months ahead in relation to its moves over its Fitness and Lifestyle business, after handing the keys of its restaurants chain that owns Rockpool Bar & Grill, to its lenders.
The move comes amid tough economic conditions whereby consumers are reigning in spending, hitting hard the middle market restaurants and is further evidence that the rising cost of living is having a strong effect on the consumer and retail industry.
Sources close to the private equity firm maintain that the luxury restaurants in the company that includes Rockpool Bar & Grill, Spice Temple, Sake Restaurant and Bar, The Cut Bar and Grill and Bar Patron are profitable, as is El Camino Cantina, but those in the shopping malls trading under brands like Fratelli Fresh have been loss making and a number have already been closed.
Overall, the group consists of about 50 restaurants and about a dozen of which are at the luxury end, and the business will continue to operate as normal.
The company has struggled for some time and numerous efforts have been made by Quadrant to find a buyer.
The private equity firm at one point considered splitting the group and selling off different parts separately.
Formerly known as The Rockpool Dining Group, its restaurants now sit within the Pacific Concepts and Hunter Hospitality stables – the latter controlling about a dozen of the company’s luxury restaurants.
Metrics Credit, a lender, now controls the business after Quadrant was unprepared to inject additional equity into the group that had debt between $100m and $200m.
Metrics bought out other lenders about six months ago, including those from South Korea, and has hired new management to run the business and pursue a new strategy, which may involve further investment.
Quadrant first purchased the restaurant group of celebrity chef Neil Perry in 2016 that included Spice Temple and Rockpool through its Urban Purveyor Group in a deal worth about $100m, and while initially involved with the private equity firm, he no longer has an interest in the business.
Quadrant purchased Urban Purveyor Group, the largest restaurant group in Australia, the year before.
The business started in 1976 and controlled more than 26 award-winning and critically acclaimed dining and entertainment venues, generating at least $200m in revenue a year.
Within its portfolio across NSW, Victoria and Queensland were restaurants and bars, including Ananas Bar & Brasserie, The Argyle, The Cut Bar & Grill, Sake Restaurant and Bar, Bavarian Bier Cafe, Munich Brahaus, El Camino Cantina, The Alfred and Fratelli Fresh.
The Rockpool Group was one of two businesses in its portfolio that were hard hit by the Covid-19 pandemic. The other was Fitness and Lifestyle Group, which owns a large chain of gyms, including those trading under the Fitness First brand.
After the global pandemic, the gyms business had $1.8bn that was refinanced, and HPS is the main lender.
While sources say there is no equity left in Fitness and Lifestyle, HPS is comfortable with Quadrant operating the company, which has seen its profitability return to pre-Covid levels.
The restaurants business is the last left in Quadrant’s fund that was launched a decade ago and included other highly profitable businesses such as Icon Cancer Care and Real Pet Food Company.
Quadrant was understood to be keen to close the fund and move on.
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