Wagamama operates primarily in the UK casual dining market. Credit: Elliott Brown.

Frankie & Benny’s restaurant brand owner The Restaurant Group (TRG) has conditionally agreed to acquire Wagamama in a £559m ($713.6m) deal.

The deal involves the purchase of the entire issued share capital of Mabel Topco, a group that owns and operates the Asian-themed chain.

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It includes a cash consideration of £357m and assumption of £202m net debt, which will be funded through a combination of cash, new debt and a rights issue.

The combined entity will focus on growth including the opening of Wagamama locations by converting TRG sites and expand Wagamama’s UK concessions through TRG’s existing relationships.

“This transaction is an exciting and transformative opportunity to create a business which can pursue a truly multi-pronged growth strategy.”

Other initiatives include exploring combined delivery opportunities using restaurants and delivery kitchens, and international growth options using Wagamama’s presence. The companies will also test pan-Asian cuisine ‘food-to-go’ offerings.

The Restaurant Group CEO Andy McCue said: “This transaction is an exciting and transformative opportunity to create a business which can pursue a truly multi-pronged growth strategy and create substantial value for our shareholders.

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“The transaction not only gives us a great brand but also creates a business with a multi-pronged growth strategy which will enhance earnings with continued selective UK rollout, accelerated via conversions of some TRG sites; by further leveraging the brand in concessions both in the UK and internationally; by maximising the opportunities presented by the rapidly growing delivery sector; and by optimising the potential within international markets.”

Following the completion of the transaction, Wagamama will continue as an autonomous division of TRG.

Wagamama chief growth officer Emma Woods will be named as its new CEO and will lead an operational team. The company’s chairman Allan Leighton will be named to The Restaurant Group’s board as a non-executive director.

Operating primarily in the UK casual dining market, Wagamama currently has 133 directly-operated restaurants in the UK, five directly-operated restaurants in the US, and 58 franchised restaurants across Europe, the Middle East and New Zealand.