Oak Hill Capital Partners has agreed to purchase Checkers Drive-In Restaurants Inc. from Sentinel Capital Partners for $525 million. The target's management team is also partnering with Oak Hill on the deal. The acquisition comes during a time with a number of private equity firms are investing in restaurant chains with national growth potential.

Checkers, based in Tampa, Florida, and founded in 1986, operates around 840 restaurants, both company-owned and franchised, under the Checkers and Rallys brands. The target is known for serving mostly burgers through its drive-thru locations. Sentinel purchased the chain in 2014.

"We believe Checkers is well-positioned to continue its long history of consistent growth," says Oak Hill managing partner Tyler Wolfram. Checkers operates in 29 states, mostly in the East, Southeast and Midwest. The company has aggressive plans to expand on the West coast by looking add up to 40 restaurants in California and at least 60 in Arizona.

Other PE firms have been investing in restaurants with growth opportunities. Golden Gate Capital has agreed to buy Bob Evans Restaurants from Bob Evans Farms Inc. (Nasdaq: BOBE); General Atlantic has taken a minority stake in Joe & the Juice; and Roark Capital bought a majority stake in Jimmy John’s Sandwiches.

Piper Jaffray Cos. (NYSE: PJC), North Point Advisors and Kirkland & Ellis are advising Checkers. Jefferies LLC and Paul Weiss Rifkind Wharton & Garrison are advising Oak Hill.

Checkers

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Demitri Diakantonis

Demitri Diakantonis

Demitri Diakantonis serves as Assistant Managing Editor. He joined Mergers & Acquisitions in 2015 as a Senior Reporter.