Arcapita Unloads Church’s Chicken
The investment firm claimed it achieved an “attractive return” despite consumer belt-tightening.
June 17, 2009
As the retail and foods market suffers from a contraction of consumer spending habits, a Bahrain-based investment firm has exited its worldwide chicken franchise.
The private equity and venture capital investment firm Arcapita Bank B.S.C. agreed to sell Church’s Chicken to Friedman Fleischer & Lowe, a San Francisco private equity firm that was founded in 1998.
In speaking with MergersUnleashed, Ransom James, an Arcapita director, declined to disclose terms of the transaction, but said, “This has been a very good sale for our investors.”
Arcapita hired Bank of America to sell the San Antonio, Texas-based chicken franchise in early May. Arcapita initially acquired the franchise from Popeyes’ previous owner, AFC Enterprises, Inc., in 2004 for $390 million.
Although the restaurant sector has suffered over the past year James said that "the value segment of the [quick service restaurants] space is a logical place to invest.” He told MergersUnleashed that the franchise’s revenue grew about 60 percent since his firm bought the franchise.
The sale follows a string of cross-border PE restaurant acquisitions. Earlier this month, Sopra Capital acquired Hogi Yogi, Teriyaki Stix and Yoasis brand fast-food restaurant chains. In May, Enterprise Investors, a Polish private equity firm, agreed to purchase a 47.9% stake in R&C Union, a Polish restaurant and music club chain for about 3 million Euros. Frango Assado, a Brazilian highway restaurant operator, was acquired by Boston, Massachusetts-based private equity firm Advent International.
Private equity investors in the U.S. have also seen promise in the troubled restaurant sector. In January, Triton Pacific Capital Partners, a private equity firm based in Los Angeles, California bought a majority stake in the Nashville, Tennessee-based restaurant chain, Dick's Last Resort.
Arcapita’s sale of Church’s Chicken was led by Stockton Croft in the firm’s Atlanta office. The transaction is expected to close by mid July, the company said in a statement. A syndicate led by Bank of America, Golub Capital, and Wells Fargo provided senior financing for the acquisition. Banc of America Merrill Lynch Securities served as financial adviser to Arcapita.
Arcapita is currently in the midst of raising a $500 million debt investment fund.
Friedman Fleischer & Lowe was founded by Tully M. Friedman, Spencer C. Fleischer, David L. Lowe and Christopher A. Masto.
Calls placed to Arcapita Bank, Friedman Fleischer & Lowe, and Church’s Chicken were not returned by press time.
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