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Domino’s Pizza is one of four bidders circling Wingstop’s UK franchise, competing with private equity groups to buy the fried chicken shop chain.
Sixth Street, the US investment group that also owns the American Wingstop franchisee Far West Services, is also among those interested in a deal that could value Wingstop at roughly £400mn, according to people familiar with the process. Private equity groups KKR and TSG Consumer Partners are the other bidders, the people said.
Wingstop would be only the second brand for Domino’s, the London-listed UK franchise of the US pizza delivery group. The FTSE 250 company told investors a year ago that, as well as pursuing growth in its pizza business, it was looking for a brand that has a “significant growth runway” and “synergies with [Domino’s] assets”.
Wingstop hired bankers from Goldman Sachs to run a sale process earlier this year, the people added. It comes as the Texas-based buffalo wing business, which was brought to the UK by three entrepreneurs in 2018 as the master franchisee Lemon Pepper Holdings, expands rapidly in the UK market.
The company, in which Tom Grogan, Saul Lewin and Herman Sahota still hold a stake, this year opened 17 sites to reach a total of 56 stores in UK high streets, retail parks and shopping centres. Wingstop, which was listed in New York in 2015 and has more than 2,000 US branches, also holds a minority shareholding in Lemon Pepper.
Its marketing centred on fashion and sports — collaborating with the likes of JD Sports, Footasylum and Gymshark — and heavy use of TikTok helped drive fans among GenZ.
Shows such as Hot Ones, the hit YouTube series where celebrities are interviewed over a platter of increasingly spicy chicken wings, have contributed to the recent chicken boom in the UK, with new players such as Dave’s Hot Chicken and Chick-fil-A entering the market.
Private equity groups are showing interest in snapping up UK fast food and casual dining chains, following a recovery in consumer confidence after the pandemic.
Apollo Global Management struck a deal to buy Wagamama owner The Restaurant Group for £506mn in October 2023, while in January this year TDR Capital took a majority stake in Popeyes UK, another chicken chain, after an initial investment the previous year.
Sixth Street, KKR, Domino’s, TSG, Goldman Sachs and Wingstop UK declined to comment. Private Equity News earlier reported some details of the deal.