Private-equity firm Sentinel Capital Partners has agreed to acquire Checkers Drive-In Restaurants Inc. from Wellspring Capital Management LLC.

A spokeswoman for the Tampa, Fla.-based operator of the 800-unit Checker’s and Rally’s hamburger chains said Monday that “terms of the stock purchase agreement are confidential” and that the deal is expected to close within 60 days.

New York City-based Wellspring had acquired Checkers and Rally’s in a June 2006 deal estimated at $188 million. The company has about 800 drive-in restaurants in more than 25 states.


RELATED
Report: Checkers preparing for IPO
Checkers sees business benefits of 'Undercover Boss' appearance
More restaurant industry finance news


Sentinel Capital, also based in New York, owns the Atlanta-based Huddle House Inc., which has 400 full-service family restaurants in 21 states.

Wellspring has reportedly been seeking a buyer for Checkers since last September.

In Nation’s Restaurant News’ most recent Top 100 census, the Checkers brand alone had 488 units and ranked No. 89 in U.S. chain systemwide sales in the year ended December 2012, falling from No. 88 in the prior year. Sales for the Checkers brand rose to $446.1 million in 2012 from $358.3 million in 2011. Checkers ranked No. 61 among chains in growth of U.S. systemwide sales, increasing 3.72 percent over the prior year.

Rally’s ranked No. 132 in U.S. systemwide sales among the chain’s in NRN’s latest Second 100 census. Sales for 288-unit Rally’s rose 4.35 percent to $249.5 million in in the year ended December 2012, from $239.1 million in the prior year, according to the census.

In October, Jennifer Durham, vice president of development for the Checkers and Rally’s brands, told NRN that a new store layout — the first in the company’s 25-year history — had helped increase sales and customer traffic in test units.

Checkers initially tested the new design in Mobile, Ala., starting in November 2011. Durham said the restaurant did about $750,000 in annual sales before the redesign, and that jumped to $1.2 million with the new model. At the time, the company had plans to redesign seven more company-owned locations during 2013.

Sentinel Capital ranked No. 157 in the most recent NRN Second 200 census, with U.S. food and beverage sales of $176.9 million in 2012, rising from $161.6 million in 2011.

In December 2012, Sentinel sold Southern California Pizza, a 224-unit Pizza Hut franchisee based in Corona, Calif., to Sterling Investment Partners LP of Westport, Conn., for an undisclosed amount. In the past, Sentinel has invested in Buffet’s Inc. and Tony Roma’s, as well as franchisee groups for the Church’s Chicken, Pizza Hut and Taco Bell brands.

The new year has already seen some restaurant-industry mergers and acquisitions.

On Jan. 16, New York-based private-equity firm Apollo Global Management LLC agreed to buy Irving, Texas-based CEC Entertainment Inc., parent to the Chuck E. Cheese’s brand, in a deal worth about $1.3 billion, including debt assumption.

In addition, the owners of the ultra-high-end global Hakkasan restaurant chain announced the acquisition of Enlightened Hospitality Group, or EHGRP, operator of celebrity chef Brian Malarkey’s restaurants primarily located in Southern California.

Contact Ron Ruggless at ronald.ruggless@Penton.com
Follow him on Twitter: @RonRuggless