Carlson has entered into an agreement for the sale of TGI Fridays Restaurants to Sentinel Capital Partners and TriArtisan Capital Partners. TGI Fridays will continue to be run by its current management team, led by President and CEO Nick Shepherd. The transaction is expected to close by July 2014.
TGI Fridays is a casual dining bar and grill with 900 restaurants in more than 60 countries. The company’s restaurants include TGI Fridays, Fridays FrontRow Sports Grill and Fridays American Bar, and employ over 70,000 people globally. System-wide sales of the group were $2.7 billion in 2013. The first TGI Fridays restaurant opened in 1965 and Carlson acquired the chain in 1975 when the brand had just 12 restaurants. TGI Fridays is headquartered north of Dallas in Carrollton, TX (www.fridays.com).
“We are proud of the Fridays brand and strong marketplace momentum that has been created over the past nearly four decades,” said Carlson President and CEO Trudy Rautio. “This transaction is a win for all parties and we are excited and confident that under Sentinel’s ownership Fridays will continue to experience significant growth and capitalize on new opportunities. For Carlson, this transaction frees up resources that the company can deploy to focus on and accelerate the growth of its hotel and travel businesses, at a time when significant opportunities exist in these markets.”
Sentinel, who will be TGI Fridays’ majority shareholder, has restaurant and franchising investment experience and a demonstrated ability to create successful independent businesses through complex corporate carve outs. Sentinel has completed numerous acquisitions of both franchisors and franchisees, including Checkers/Rally’s, the largest franchisor and operator of dual drive-thru hamburger QSRs in the United States; Newk’s Eatery, a rapidly growing fast-casual concept in the Southeast United States; Falcon Holdings, the largest franchisee of Church’s Chicken restaurants; Huddle House, a leading franchisor of family dining restaurants in the Southeast; Massage Envy, the nation’s largest provider and franchisor of therapeutic massage and spa services; and Southern California Pizza Company, a 223-unit Pizza Hut franchisee operating in the greater Los Angeles market.
“We are very excited to partner with TGI Fridays’ outstanding management team,” said John McCormack, a Sentinel senior partner. “TGI Fridays is an iconic global brand with a long history of solid performance and a significant opportunity for future growth.”
Sentinel Capital Partners invests in middle market companies in the United States and Canada in partnership with management. The firm invests in management buyouts, recapitalizations, corporate divestitures, and going-private transactions of businesses with EBITDAs between $7 million and $40 million. Sentinel targets eight industry sectors: aerospace & defense, business services, consumer, distribution, food & restaurants, franchising, healthcare, and industrials. The firm is headquartered in New York (www.sentinelpartners.com).
Tri-Artisan Capital Partners operates as the investment arm of Morgan Joseph TriArtisan Group and invests in consumer and retail, industrial, healthcare, media and telecommunication, leisure, real estate, gaming, lodging, hospitality, and diversified service sector companies. Tri-Artisan Capital Partners is based in New York (www.morganjoseph.com).
Carlson is a hospitality and travel company. The Carlson Rezidor Hotel Group includes more than 1,340 hotels in operation and development, including, Quorvus Collection, Radisson Blu, Radisson, Radisson Red, Park Plaza; Park Inn by Radisson and Country Inns & Suites By Carlson; and a majority stake in Carlson Wagonlit Travel. Carlson operates in more than 150 countries and territories and its brands employ more than 100,000 people. The company is headquartered in Minneapolis (www.carlson.com).
Piper Jaffray & Co. served as Carlson’s financial advisor for this transaction and Locke Lord served as legal counsel. Kirkland & Ellis served as legal counsel to Sentinel.
© 2014 PEPD • Private Equity’s Leading News Magazine • 5-21-14
