The Johnny Rockets burger chain has been acquired by an affiliate of private-equity group Sun Capital Partners Inc.
North Point Advisors, financial advisors on the deal, made the announcement late Monday. Terms of the deal were not disclosed.
Johnny Rockets was sold by RedZone Capital Management Co., which said earlier this year that North Point had been hired to explore a possible sale of the Aliso Viejo, Calif.-based chain.
Industry observers familiar with the offer said at the time that the company’s asking price was in the range of $100 million to $150 million, which was about nine to 13 times earnings before interest, taxes, depreciation and amortization, or EBITDA, of about $12 million.
John Fuller, Johnny Rockets’ chief executive, said Tuesday he could not comment on details of the transaction, but he said he was pleased with the result and that there will be no changes to management. “These guys are fantastic,” he said of Sun Capital. “They’re one of the premier private-equity groups in the restaurant space.”
Sun Capital is known for investing in restaurant chains with turnaround potential, but Fuller said Johnny Rockets was an exception. “We weren’t a broken company and it wasn’t a turnaround,” he said. “They viewed us as a growth company.”
Calls to Sun Capital were not immediately returned.
The Johnny Rockets chain, which is about 75-percent franchised, grew rapidly in the 1990s but later became mired in debt, and growth was put on hold while the company closed underperforming locations.
RedZone bought Johnny Rockets in 2007 from Centre Partners Management LLC and Apax Partners Inc., two private-equity firms that owned the chain along with heirs of late founder Ronn Teitelbaum, who died in 2000.
Johnny Rockets operates and franchises about 300 restaurants in 30 states and 16 countries, including 17 Six Flags amusement parks, which were also previously owned by RedZone Capital, and 11 Royal Caribbean cruise ships. The chain has about 220 locations in the U.S, about 30 of which are company owned, and 85 international units.
The company in recent years has been aggressively building the Americana-themed brand overseas, opening for the first time recently in Nigeria, as well as growing in Central America, Pakistan, India, Indonesia and the Philippines. One of the largest international deals the chain has signed is in Russia, where franchisees plan to open 40 locations.
Fuller said about 60 units are scheduled to open over the next 12 months, including units in four new countries. “The interest level has never been higher,” he said.
He declined to disclose sales information, but Fuller said Johnny Rockets enjoyed about nine consecutive quarters of same-store sales growth until the end of January, when trends flattened out. “It’s still a fight out there,” he noted, referring to the macroeconomic environment. “We’re continuing to stick with the fundamentals and focusing on our great-tasting food.”
Founded in 1986 in Los Angeles, Johnny Rockets is known for its diner-style burgers, sandwiches, milkshakes and fries served with a ketchup smiley face on the plate. Tableside jukeboxes play rock and roll, and servers are encouraged to dance and sing along.
With the deal, Johnny Rockets joins a growing restaurant portfolio under Sun Capital, which is known for investing in brands with turnaround potential.
Boca Raton, Fla.-based Sun Capital’s restaurant portfolio includes Orlando, Fla.-based Smokey Bones Bar & Fire Grill; Golden, Colo.-based Boston Market Corp.; Addison, Texas-based Bar Louie; Lexington, Ky.-based Fazoli’s; Seattle-based Restaurants Unlimited; San Diego-based Garden Fresh Restaurant Corp.; Nashville, Tenn.-based Captain D’s; Wilbraham, Mass.-based Friendly’s Ice Cream LLC; and a restaurant chain in the Netherlands called La Place.
This article has been revised to reflect the following updates and corrections:
Update: June 18, 2013 This article has been updated with comments from John Fuller, Johnny Rockets’ chief executive.
In addition, an earlier version of this story indicated that RedZone Capital still owned the Six Flags amusement parks. RedZone no longer owns the amusement park brand after it filed for Chapter 11 bankruptcy in 2009.
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