Dive Brief:
- Brentwood Associates has acquired a majority interest in Chicken Salad Chick from Eagle Merchant Partners, according to a press release.
- During Eagle Merchant Partners' ownership of the brand, it increased system sales seven-fold.
- Chicken Salad Chick has 137 locations across 16 states, primarily in the Southeast.
Dive Insight:
Brentwood Associates has been an active player in the restaurant investment space, and is a current investor in Blaze Pizza and Lazy Dog. The consumer-focused private equity firm typically holds on to investments for around six years. It also invested in Pacific Island Restaurants.
Eagle Merchant Partners became involved with the brand early in its trajectory, signing a deal in May 2015. By the end of 2016, the brand surpassed $45 million in sales and maintained 63 units.
"Chicken Salad Chick's model fits well within our strategy of investing in high-growth, best-in-class consumer businesses," Rahul Aggarwal, partner at Brentwood, said in a company release. "We look forward to working with Scott and the Chicken Salad Chick team to build upon their success in the markets they serve."
The Southern brand announced an ambitious expansion strategy earlier this year, with plans to open 250 units in the next five years — a rapid clip for a brand that started as a niche sandwich shop. Whether Brentwood has other plans for its expansion pace remains to be seen.
Investors have been active in the restaurant space this year, with casual dining especially becoming a prime target, for takeovers and other M&A activity this year. TGI Fridays plans to go public through a $380 million sale to Allegro Merger, and Landry's recently bought Del Frisco's from L Catterton, while also making a $40 million offer for bankrupt Houlihan's. Apollo is also reportedly considering a sale of Qdoba for $550 million. Activists also pressured Red Robin, Bloomin' Brands, and J. Alexander's to engage in sales discussions this year. Other brands that have sold this year include Pei Wei, P.F. Chang's and Jack's Family Restaurants.
