TGI Fridays is changing hands with Tuesday’s announcement by the Carlson Companies that it has agreed to sell the restaurant chain to private equity firms Sentinel Capital Partners and TriArtisan Capital Partners.
Locke Lord is representing Minneapolis-based Carlson on the sale of the casual dining chain known for its distinctive red-and-white awnings. Kirkland & Ellis is advising Sentinel in connection with the transaction, and Schulte Roth & Zabel is acting as outside counsel to TriArtisan.
Though the terms of the deal were not disclosed, The Wall Street Journal estimated its value at $800 million, including debt, however. The deal is expected to close in July.
TGI Fridays operates more than 900 restaurants in 60 countries, and had sales of $2.7 billion in 2013, according to a company press release. The chain, which opened its first restaurant in New York in 1965, has exceeded industry average performance in the casual dining category, according to trade journal Nations Restaurant News.
Carlson, which also owns Radisson Hotels, acquired TGI Fridays in 1975 when it only had 12 restaurants. Despite the chain’s massive growth since, the restaurant category itself has come under pressure in the postrecession economy. There have been numerous private equity acquisitions of restaurants this year, according to media reports.
“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,” company president and CEO Trudy Raudio said in a statement.
Wednesday’s deal will make Sentinel the majority shareholder of TGI Fridays, which joins the recently purchased Newk’s Eatery franchise holding company and Checkers Drive-In restaurants in the private equity firm’s portfolio, according to the Sentinel website. TriArtisan is the merchant banking arm of Morgan Joseph TriArtisan Group, which also has invested in Sara Lee Corp. and Sur La Table, among other consumer companies.
“We are very excited to partner with TGI Fridays’ outstanding management team,” said Sentinel senior partner John McCormack of Wednesday’s announcement. “TGI Fridays is an iconic global brand with a long history of solid performance and a significant opportunity for future growth.”
The Locke Lord team representing Carlson in the transaction include partners Christopher Allison, J. Mitchell Bell, Paul Coggins, J. Dean Hinderliter, Kip Mendrygal, Geoffrey Polma, Edward Razim, Whit Roberts, Christopher Schrauff, Karin Torgerson and Kevin Twining. Also advising from the firm are counsel Dovi Adlerstein and associates Laura Ferguson, Susan Fisher, Mackenzie Horton, David Lange, Marc Lipscomb, Kevin Satter, Matt Stockstill and Amy Gremminger White. Locke Lord also represented Carlson in 2010 in connection with the sale of its Regent hotels brand for $55 million, according to its website and a real estate trade publication.
William Van Brunt serves as Carlson’s executive vice president and general counsel.
The Kirkland team representing Sentinel includes corporate partners Drew Grabel and Elazar Guttman, and corporate associates Lauren Rakower and Jessica Murray in New York. Kirkland also advised Sentinel on the private equity firm’s acquisitions of Checkers and Newk’s Eatery in March, the firm said. (This is the second major restaurant industry deal for Kirkland this month. The firm is representing Golden Gate Capital on its acquisition of the Red Lobster chain from Darden Restaurants Inc. in a $2.1 billion deal announced last week.)
The Schulte Roth team representing TriArtisan includes partner Michael Littenberg and special counsel Farzad Damania. The firm would not comment on whether it has done other work for TriArtisan.
Piper Jaffray & Co. served as Carlson’s financial adviser in the sale.