Argonne to acquire On The Border

Golden Gate Capital has agreed to sell the 157-unit On The Border Mexican Grill & Cantina casual-dining brand to Argonne Capital Group, the companies said Thursday.

Terms of the deal were not disclosed. The acquisition company is Border Holdings LLC, and Atlanta-based Argonne and Irving, Texas-based Fortress Investment Group LLC partnered on the transaction.

Irving, Texas-based On The Border owns and operates 121 domestic units and franchises 36 locations across the United States, Puerto Rico, Saudi Arabia and South Korea.

“We see a tremendous amount of strength in the On The Border brand and are confident that the company’s unique menu and atmosphere will appeal to a broad demographic as we look to expand this chain nationwide,” Karl Jaeger, Argonne’s managing director, said in a statement.

Golden Gate bought On The Border from Dallas-based Brinker International Inc. in July 2010 in a deal valued at $180 million.

“We are pleased with the outcome of our successful investment in On The Border and believe the company is well-positioned for the future,” said Josh Cohen, Golden Gate’s managing director. “Argonne will be a great partner for On The Border as the company enters its next chapter of growth, and we are confident the brand will continue to thrive under Argonne’s ownership.”

Argonne owns a number of restaurant brands outright or through franchisee holding companies, including Krystal, Stevi B’s Pizza, Applebee’s and IHOP. In the Nation’s Restaurant News 2013 Top 100 company census, Argonne ranked No. 46, with $753.7 million in domestic food and beverage sales.

Golden Gate Capital owns the California Pizza Kitchen and CPK ASAP brands. In the NRN 2013 Top 100 company census, which included On The Border sales, Golden Gate ranked No. 27, with $1.27 billion in domestic food and beverage sales. The company sold the Macaroni Grill brand to Houston-based Ignite Restaurant Group Inc. for $55 million in April 2013.

“We are extremely excited to partner with Argonne as we continue to successfully execute against our strategy,” said Steve Clark, chief execuitive of On The Border. “We have enjoyed the strong support of Golden Gate Capital and look forward to working with our new partners.”

King & Spalding and McGuireWoods LLP advised Argonne in the deal. Jefferies LLC served as financial advisor to On The Border and Golden Gate Capital. Kirkland & Ellis LLP served as legal adviser to Golden Gate Capital.

Contact Ron Ruggless at [email protected].
Follow him on Twitter: @RonRuggless