Bank Restaurant Group has confirmed that it is going ahead with a reverse takeover.
BRG, which in Birmingham owns Bank in Brindleyplace and Zinc in Gas Street Basin, admitted earlier this month that talks with the Individual Restaurant Company were at an "advanced stage".
IRC owns the fast-growing Piccolino and Restaurant Bar & Grill chains and has 16 sites across the UK.
It will now call the shots. The deal involves an initial payment of up to #14.47 million, mostly in cash and loan notes, and the assumption of #17.77 million of debt within IRC.
An additional consideration of up to #8.5 million is possible dependent on the performance of certain IRC restaurants up to March 31, 2008.
The acquisition is subject to shareholder approval with completion expected on December 22. Share placings are being underwritten by stockbroker Altium, and will raise in aggregate #32 million – approximately #29.51 million net of expenses and other related costs.
Robert Breare, executive chairman of BRG, said: "This represents the 'acquisition of scale' which we have been striving to achieve over the past months.
"I believe it represents first prize in terms of the strength of IRC’s management team and the strength of its two brands, together with their excellent fit with our existing assets. The combined entity is well placed to grow earnings and maximise value for shareholders in the longer term." Steven Walker, chief executive of IRC, said: "We look forward to capitalising on the opportunities that being part of the enlarged group will present.
"The combination of the Piccolino and Restaurant Bar & Grill brands with Bank’s existing estate should prove a powerful one and we are committed to driving synergies and earnings going forward."
The IRC restaurants serve over 18,000 customers per week. There are 12 restaurants operating under the Piccolino brand and four restaurants under the Restaurant Bar & Grill name.
Both operate within the so-called premium casual dining market and are "high quality, value for money concepts with proven track records and strong roll-out potential".
Piccolino is an Italian restaurant concept, with five outlets city centre based and the remaining seven based in affluent suburban and town locations.
The Restaurant Bar & Grill branded restaurants are based in Manchester, Leeds, Marlow and Alderley Edge. The enlarged group will have 23 restaurants.
Following the deal Mr Walker will be chief executive with Mr Breare as non-executive chairman. The aim is to open a minimum of six restaurants per year concentrating on the Piccolino brand.
The firm stated: "The directors believe that there may be significant savings to be made in terms of food and beverage purchasing synergies and other shared services."
It intends to "bring the Bank and Zinc restaurants into line with the IRC systems and, over time, rationalise the menus and assess each venue on a case by case basis".
The Bank restaurants are said to have performed well, with overall trading levels ahead of last year.