casual restaurant

Sentinel Capital Partners has acquired Fazoli’s Group, an Italian fast casual franchisor and operator of Fazoli’s restaurants, from Sun Capital Partners.

Fazoli’s is a Italian fast casual dining concept that offers moderately priced Italian pasta entrees, sandwiches, pizza and salads.  Fazoli’s has 213 franchised and company restaurants.  The company was founded in 1988 and is headquartered in Lexington, KT (www.fazolis.com).

“Fazoli’s has consistently outperformed its competitors and will be a strong addition to our restaurant portfolio,” said John McCormack, a partner at Sentinel.

Sentinel’s restaurant portfolio is made up of more than 2,300 units operating in 61 countries and generates annual system-wide sales of almost $4 billion. The firm’s restaurant investments include Newk’s Eatery; TGI Fridays; Checkers; Huddle House; Border Foods (a franchisee in the Taco Bell system); Falcon Holdings (a franchisee in the Church’s Chicken system); and Southern California Pizza Company (a franchisee in the Pizza Hut system).

“Fazoli’s combines the strengths of the fast-casual, quick-service and full-service formats, which is a competitive differentiator and provides resilience during economic downturns.  We are also impressed with Fazoli’s’ management team and look forward to working with them to drive future growth,” added Mr. McCormack.

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 up to $65 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).

“Our new partnership with Sentinel is an exciting move for us, and we plan to benefit from their investment experience in the restaurant sector,” said Carl Howard, CEO of Fazoli’s Group.

Duff & Phelps (www.duffandphelps.com) was the exclusive financial advisor to Fazoli’s and managed the entire sales process including the marketing, negotiation and due diligence phases of the transaction.  The Duff & Phelps deal team supporting Sun Capital Partners in this transaction included Joshua Benn and Darren Gange.

© 2015 PEPD • Private Equity’s Leading News Magazine • 7-7-15

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

Darden Restaurants has entered into an agreement to sell its Red Lobster business and certain other related assets and assumed liabilities to Golden Gate Capital for $2.1 billion in cash.  The purchase price is approximately 9x Red Lobster’s EBITDA for the twelve months ending April 27, 2014.  Darden expects the sale of the Red Lobster business to close in the first fiscal quarter of 2015.

Red Lobster is a casual dining restaurant chain with705 Red Lobster locations worldwide. The company has operations in Canada, Saudi Arabia, the United Arab Emirates, Qatar and Japan. Red Lobster was founded in March 1968 by entrepreneurs Bill Darden and Charley Woodsby and is based in Orlando (www.redlobster.com).

“Red Lobster is an exceptionally strong brand with an unparalleled market position in seafood casual dining,” said Josh Olshansky, Managing Director at Golden Gate Capital.  “Red Lobster is exactly the type of company in which we seek to invest given its great brand profile and strong management team.  We see significant opportunities for future growth by partnering with CEO Kim Lopdrup and the management team to support the long-term success of Red Lobster.”

Golden Gate Capital has obtained committed debt financing from Deutsche Bank AG, Jefferies and GE Capital, and has fully executed a separate $1.5 billion sale-leaseback agreement with American Realty Capital Properties, the proceeds of which will be used to support the financing of Golden Gate Capital’s purchase of Red Lobster.

Deutsche Bank Securities and Jefferies are serving as financial advisors to Golden Gate Capital in connection with the transaction.  Goldman, Sachs & Co. is serving as Darden’s exclusive financial advisor on the sale of Red Lobster.

Golden Gate Capital targets companies across a range of industries and transaction types, including leveraged buyouts, recapitalizations, corporate divestitures and spin-offs, build-ups and venture stage investing. The firm has approximately $12 billion of capital under management and is based in San Francisco (www.goldengatecap.com).

Darden Restaurants (NYSE: DRI) is a multi-brand restaurant operator headquartered in Orlando.  The firm owns several casual dining restaurant brands: Olive Garden, LongHorn Steakhouse, Red Lobster, Bahama Breeze, Seasons 52, Eddie V’s Prime Seafood, The Capital Grille and Yard House. Darden has more than 2,100 restaurant locations and more than 200,000 employees, making it the world’s largest full-service restaurant company (www.darden.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-16-14

Brentwood Associates has made a significant investment in Lazy Dog Restaurant & Bar, a casual dining restaurant company. CEO and founder Chris Simms will continue to lead the company and the management team will retain a substantial ownership stake in the company.

“At Lazy Dog, we’ve always focused on supporting and developing our people, enabling us to provide a high-quality experience for our guests,” said Chris Simms, CEO of Lazy Dog. “As we celebrate our 10th anniversary this August, we are pleased to have found a partner that shares our passion for hospitality and can support our continued expansion of the concept. Brentwood’s experience growing leading national brands and restaurants will be invaluable as we look toward the future.”

Lazy Dog Restaurant & Bar was founded in 2003 and has 12 locations throughout California (www.lazydogrestaurants.com). Lazy Dog represents the fifth investment Brentwood has made in the restaurant industry in the last decade.

“Lazy Dog is a highly differentiated restaurant company that has all of the key tenets we look for – fantastic food, a great culture and top-notch leadership,” said Rahul Aggarwal, Managing Director at Brentwood. “We look forward to our partnership with Chris and his team.”

Brentwood Associates is a consumer-focused private equity investment firm with over $850 million of capital under management. Sectors of interest include branded consumer products; consumer and business services; direct marketing, including direct mail and e-commerce; education; health and wellness; restaurants; and specialty retail. The firm was founded in 1972 and is based in Los Angeles, CA (www.brentwood.com).

Lazy Dog was advised by Piper Jaffray & Co.

© 2013 PEPD • Private Equity’s Leading News Magazine • 7-29-13