PRINCETON N.J. Sovereign Investment Co. said it has completed a $69 million sale-leaseback transaction to allow Lone Star Funds to recapitalize its investment in Lone Star Steakhouse & Saloon. Sovereign bought 35 of Lone Star’s remaining 180 restaurants and will lease them back to the restaurant operator for a minimum of 15 years, the company said.
Lone Star Steakhouse closed 26 restaurants and laid off 1,500 employees in February. The Wichita, Kan.-based company, which also operates Texas Land & Cattle Steak House, closed 44 restaurants in 2007. The concern's brands operate in 30 states.
Lone Star Funds took Lone Star Steakhouse & Saloon private in December of 2006. Sovereign also recently financed sale-leaseback transactions with private-equity firms J.S. Chapman and Sun Capital Partners.