CenterOak Partners has sold Wetzel’s Pretzels, the second largest US franchisor and owner of quick service restaurants operating in the soft pretzel category, to MTY Franchising USA, a subsidiary of publicly traded MTY Food Group, for $207 million. CenterOak acquired Wetzel’s in 2016 from Levine Leichtman Capital Partners.
Wetzel’s menu includes fresh baked soft pretzels, Wetzel Dogs, Wetzel Bitz pretzel bites, fresh lemonade, granita, and other beverages. The company’s stores are located in shopping malls, outlet centers, theme parks, discount retail stores, train stations, and airports. Today, Pasadena, California-headquartered Wetzel’s has over 350 locations in 25 US states, Canada, Puerto Rico, and Panama.
According to industry sources, during the last twelve months, total network sales were $245 million and EBITDA was $17 million. Based on the $207 million purchase price, this results in a valuation multiple of 12.2x.
“We are pleased to see the successful culmination of our investment in Wetzel’s,” said Randall Fojtasek, CEO and co-managing partner of CenterOak. “During the investment period, we accelerated the company’s growth by adding new real estate formats, product offerings, and services to attract additional consumers to the concept. We look forward to the continued success of the Wetzel’s brand under new ownership.”
Dallas-headquartered CenterOak makes equity investments of $20 million to $150 million in companies with enterprise values of $50 million to $500 million and EBITDA of $5 million to $35 million. Sectors of interest include industrial manufacturing and distribution, business services, and consumer products and services. In April 2021, CenterOak held an oversubscribed and hard cap close of its second fund, CenterOak Equity Fund II LP, at $690 million. CenterOak’s first fund closed in 2016 at its hard cap of $420 million.
Montreal-headquartered MTY Food Group (TSX: MTY) franchises and owns quick-service, fast-casual, and casual dining restaurants in Canada, the United States, and internationally. The company has more than 7,000 locations across more than 80 store brands.
North Point was the financial advisor to Wetzel’s on this transaction.
© 2022 Private Equity Professional | December 13, 2022
