Sentinel exits restaurant chain Huddle House, coming off new fundraise

Sentinel Capital Partners has sold restaurant chain Huddle House Inc. to family office Elysium Management. The deal comes on the heels of Sentinel raising its sixth fund.

Elysium, based in Miami, manages investments for the family office of Apollo Global Management LLC (NYSE: APO) co-founder Leon Black. Family offices are competing harder with private equity firms by making more direct investments. In 2017, Apollo agreed to acquire Mexican restaurant chain Qdoba from Jack in the Box Inc. (Nasdaq: JACK).

Atlanta-based Huddle House, founded in 1964, operates 349 restaurants focusing "cooked-to-order food" such as country fried steak.The target has about $240 million in annual sales. Sentinel acquired Huddle House in 2012. Demand for fresh food has been one of the drivers in restaurant M&A.

“Throughout our ownership, Huddle House has achieved impressive, system-wide operational results that have increased efficiency and improved productivity at the individual restaurant level," says Sentinel partner Jim Coady.

Sentinel is a middle-market private equity firm based in New York. The firm backs businesses with up to $65 million in Ebitda across the aerospace and defense, business services, consumer, distribution, food and restaurants, healthcare and industrial sectors. The PE firm has been active buyer and seller of restaurant chains. In 2017, Sentinel acquired the Captain D's seafood chain from Centre Partners and sold Checkers to Oak Hill Capital Partners.

The restaurant sector has been busy with private equity-backed deals. Roark Capital Group has agreed to buy restaurant chain Buffalo Wild Wings Inc.; L Catterton has agreed to purchase casual Mexican restaurant Uncle Julio’s; TPG Growth has acquired a majority stake in farm-to-fresh restaurant chain Mendocino Farms from L Catterton.

Harris Williams & Co. advised Huddle House. Financial terms of terms of the deal were not disclosed.