ATLANTA Arcapita Inc. said Wednesday that it signed a deal to sell Church's Chicken to another private-equity firm, ending speculation that the 1,650-unit fast-food chain was on the block.
Terms of the deal between Arcapita and the buyer, San Francisco-based Friedman Fleischer & Lowe, were not disclosed. However, reports last week indicated the price would be in the $300 million range. Arcapita paid $390 million in 2004 when it acquired Church's franchisor, Cajun Operating Co., from Popeyes' parent AFC Enterprises Inc.
The deal is expected to close within 30 days. Bahrain-based Arcapita said in a statement that financing for the transaction would be provided by a syndicate led by Bank of America, Golub Capital and Wells Fargo and some of Church's existing lenders.
"Considering that for almost a year markets have been shut to this scale of [leveraged buyout] transaction, this announcement is a significant achievement, and reflects the tremendous quality of the company we have built with management over the last four and a half years," said Stockton Croft, head of Arcapita's U.S. Corporate Investment Group.
David L. Lowe, vice chairman of Friedman Fleischer & Lowe, said: "The acquisition of Church's Chicken represents an opportunity to apply our sector expertise to enhance value of an outstanding quick service restaurant chain. We are impressed by Church's global footprint, compelling value positioning, history of industry-leading same-stores sales growth, and of course the opportunity to further expand domestically and internationally."
Reports surfaced in April that Arcapita was considering selling the chain and had hired Bank of America Merrill Lynch to explore a possible sale.
Atlanta-based Church’s Chicken is known for its Southern-style chicken, corn on the cob and honey-butter biscuits. The chain has annual global systemwide sales of $1.2 billion.
Contact Elissa Elan at [email protected].
