New York–based private equity firm Lee Equity Partners signed a definitive agreement to purchase the nearly 1,200-unit Papa Murphy's Take ’N’ Bake pizza chain from its majority owner, Charlesbank Capital Partners. Terms of the deal are not being disclosed.
Papa Murphy’s says the transaction will position the company for its next phase of growth, as it continues to seek new franchise owners and open locations, primarily in the Southwestern and Southeastern U.S. The deal is expected to close in the second quarter of 2010.
Since Papa Murphy’s recapitalization by Charlesbank in 2004, the take ‘n’ bake pizza pioneer has seen its domestic system-wide sales increase by more than 63 percent, according to John Barr, chairman and CEO of Papa Murphy’s.
“Charlesbank has been a great value-added partner, and I credit much of our strong position in the current marketplace to their support over the years,” Barr says. “This new chapter with Lee Equity will undoubtedly benefit all of the brand’s stakeholders, including our franchisees, employees, and vendors. I look forward to working together to provide an even stronger foundation for expansion and profitable growth.”
“John Barr and the management team have done a terrific job developing the company internally and fortifying its industry leadership position and strong franchise network,” says Michael Eisenson, Charlesbank CEO. “This has been a rewarding investment for us, and we look forward to a very successful partnership between the company and Lee Equity Partners as the management team continues to execute their strategy for growth.”
Thomas H. Lee, president of Lee Equity Partners, said that his organization was impressed with Papa Murphy’s potential for future growth.
“This is an outstanding brand with a strong management team. We are very excited about the expansion possibilities into areas of the country where they have little or no presence today.”
Lee has been involved in a number of high-growth, consumer-oriented acquisitions, including Snapple Beverage Corp., General Nutrition Companies, PETCO Animal Supplies Inc., Ghirardelli Holdings Corp., Banana Boat, and Sterling Jewelers Inc., among others.
North Point Advisors and Wells Fargo Securities served as strategic consultants to Charlesbank and Papa Murphy’s on the transaction.