Tortilla wraps up deal to buy French burrito rival

Tortilla is buying 13 restaurants from rival Fresh Burritos in prime locations in Paris and other cities in France.

The company acquired rival Mexican chain Chilango last year (Tortilla/PA)

Burrito chain Tortilla has bought its biggest European competitor in a deal worth nearly £4 million, as it hopes to attract new consumers on the go, ahead of the Paris Olympics.

Tortilla is buying 13 restaurants from rival Fresh Burritos, in prime locations in Paris and other cities in France.

The acquisition also includes a network of 19 franchised locations and the rights to the brand.

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’s international ambitions are no secret, and acquiring Fresh Burritos is our gateway to mainland Europe.

“With Mexican cuisine surging in popularity, these prime French locations give us a solid launchpad.”

He said the purchase comes “just in time for the Paris Olympics”, with businesses hoping to cash in on the millions of expected visitors to the French capital to watch the games.

The 3.95 million euro (£3.3 million) acquisition has been funded through a combination of cash payment and existing debt facilities, Tortilla said.

It is forecast to take a £500,000 hit to adjusted earnings this year, but will start to generate a profit for the business, estimated at £500,000 next year then about £2.5 million per year.

Fresh Burritos was operating at a loss last year, reporting an annual loss before tax of 100,000 euros (£84,500) on revenues of nine million euros (£7.6 million).

Tortilla has previously said that despite consumer spending on eating out still under pressure from the higher cost of living, it has seen long-term interest in Mexican-inspired burritos that are quick and affordable.

It said its locations in busy city-centre locations, shopping centres and travel hubs were doing especially well, but it had found trading in quieter locations in regional towns and cities more challenging.