Carlson has agreed to sell TGI Fridays Restaurants to Sentinel Capital Partners and TriArtisan Capital Partners for an undisclosed amount.
Minneapolis-based Carlson, which also owns more than 1,340 hotels including the Radisson brand, put TGI Fridays up for sale last November. Reports of Sentinel and TriArtisan coming together to pursue an acquisition of the pioneering casual-dining brand surfaced in early March.
The parties said in a statement that TGI Fridays’ current management team, led by president and chief executive Nick Shepherd, would remain in place following the closure of the sale, which is expected to finish in July.
“This transaction is a win for all parties, and we are excited and confident that under Sentinel’s ownership, Fridays will continue to experience significant growth and capitalize on new opportunities,” Carlson chief executive Trudy Rautio said in a statement. “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.”
Carlson purchased TGI Fridays in 1975, when the brand had just 12 restaurants, and grew it to a chain of more than 900 units in 60 countries, with sales totaling $2.7 billion worldwide in 2013.
Research in the latest Nation’s Restaurant News report showed TGI Fridays’ estimated sales per unit at $3.31 million in fiscal 2012, a 2.3-percent increase over $3.23 million in its preceding fiscal year.
Sentinel will be the majority shareholder of TGI Fridays. The New York-based private equity firm also owns several restaurant franchisors, including Checkers Drive-In Restaurants, Huddle House and Newk’s Eatery. The firm used to own some large franchise operators, such as Falcon Holdings, which is the largest franchisee of Church’s Chicken, and Southern California Pizza Company, a 223-unit Pizza Hut franchisee in the Los Angeles area.
“We are very excited to partner with TGI Fridays’ outstanding management team,” John McCormack, a Sentinel senior partner, said in a statement. “TGI Fridays is an iconic global brand with a long history of solid performance and a significant opportunity for future growth.”
Piper Jaffray & Co. served as Carlson’s financial advisor during its strategic review process for TGI Fridays, while Locke Lord LLP served as Carlson’s legal counsel. Kirkland & Ellis LLP was legal counsel for Sentinel.
This story has been revised to reflect the following correction:
Correction: May 21, 2014 This article has been updated to more accurately reflect Sentinel Capital Partners’ holdings in the restaurant industry. Sentinel owns the Checkers Drive-In Restaurants, Huddle House and Newk’s Eatery franchisors.
Contact Mark Brandau at firstname.lastname@example.org.
Follow him on Twitter: @Mark_from_NRN