An affiliate of private-equity firm Sun Capital Partners Inc. announced on Tuesday an agreement to sell the Captain D’s Seafood Restaurant chain to another private-equity firm, Centre Partners.

Terms of the deal were not disclosed, but the transaction included the 60-unit all-franchised secondary brand Grandy’s Country Cookin’, which Captain D’s acquired in 2011.

Known for its hand-breaded fish tenders, Nashville, Tenn.-based Captain D’s operates and franchises 527 restaurants in 25 states and on military bases around the world. Sun Capital reportedly put the seafood chain up for sale in June with North Point Advisors.

Centre Partners and Sun Capital have crossed paths before. Based in New York, Centre Partners previously owned the Johnny Rockets chain, along with Apax Partners Inc. and the chain’s founder, but they sold it to RedZone Capital Management Co. in 2007. Sun Capital acquired Johnny Rockets from RedZone earlier this year.

Centre Partners also lists on its website an investment Garden Fresh Holdings, parent to the Souplantation/Sweet Tomatoes salad-buffet chain, which Sun Capital also owns. Separately, Centre Partners also has invested in Uno Restaurant Holdings Corp.

Officials with Centre Partners did not return calls at press time.

Boca Raton, Fla.-based Sun Capital acquired Captain D’s in 2010 at a time when the quick-service chain had suffered years of declining same-store sales. Sun Capital staged a turnaround over the past few years that has resulted in 27 consecutive periods of systemwide same-store sales growth, the firm said.

Sun Capital implemented financial controls, a “robust” procurement process and better labor management, the firm said. And the chain executed a new restaurant design and revamped menu, improving food quality and strengthening the value message to consumers.

M. Steven Liff, Sun Capital’s senior managing director, said Captain D’s transformation began with the hiring of Phil Greifeld as chief executive. “He’s a very passionate leader and he successfully rebuilt the organization, implementing upgrades across the system in terms of personnel,” Liff said.

The chain also added Jim Stevens as chief operating officer; and Michael Arrowsmith as chief development officer.

Liff said Captain D’s reworked the menu to upgrade quality and consistency. “It was a very inconsistent product,” he said. “And we looked at reconnecting with consumers with respect to value, including adding meal deals starting at $4.99.”

Sun Capital also developed a remodel program that has translated to more interest in the brand, Liff said. “We recently signed on new franchisees, so the chain has a lot of momentum going in for the new owners.”

During fiscal 2012, same-store sales increased 9.2 percent at company-owned locations and 7.5 percent at franchised units — both setting records for the brand. In 2011, the chain saw its first same-store sales increase in eight years.

The chain had systemwide sales of $467.1 million among domestic locations in fiscal 2012, a 7.8-percent increase over the prior year’s domestic systemwide sales of $433.3 million, according to Nation’s Restaurant News’ annual Top 100 census.

The chain ended 2012 with 517 units, including 278 company-owned and 239 franchised restaurants, down from 590 units at the end of 2006, though most of the closures occurred before Sun Capital’s ownership, Liff said.

“We are extremely proud of the transformation and revitalization of Captain D’s,” Marc Leder, co-chief executive of Sun Capital, said in a statement. “We’re confident that the combination of operational improvements and customer-focused solutions that have been achieved over the past three years will enable the business to continue to build on its strong market position.”

Sun Capital’s restaurant portfolio includes Boston Market, Smokey Bones Barbeque & Grill, Bar Louie Restaurants, Friendly’s Ice Cream, Restaurants Unlimited, Garden Fresh, Fazoli’s, and Johnny Rockets.

Update: Oct. 15, 2013 A previous version of this story has been updated with comments from Sun Capital.

Contact Lisa Jennings at lisa.jennings@penton.com.
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