Blackstone has agreed to purchase Jersey Mike’s Subs, the sandwich chain mentioned Tuesday, in a deal {that a} supply mentioned valued the corporate at round $8 billion, together with debt.
Reuters had reported on Monday, citing an individual aware of the matter, that Blackstone was nearing a deal for Jersey Mike’s.
The deal, which is predicted to shut in early 2025, underscores personal fairness (PE) corporations’ growing curiosity in franchise operators.
Final yr, PE agency Roark Capital agreed to purchase Subway, Jersey Mike’s larger rival, in a deal valued at as much as $9.55 billion.
Jersey Mike’s, identified for its submarine sandwiches, traces its roots again to 1956 when Cancro began working on the firm’s Level Nice, NJ., location, which was based as Mike’s Subs.
Cancro acquired the placement in 1975 and commenced franchising items in 1987. Since then, Jersey Mike’s has grown into one of many main fast-casual restaurant chains in America with over 3,000 places nationwide open and in growth.
“We believe we are still in the early innings of Jersey Mike’s growth story and that Blackstone is the right partner to help us reach even greater heights,” Jersey Mike’s founder and CEO Peter Cancro mentioned.
Cancro will preserve an fairness stake in Jersey Mike’s and proceed to guide the enterprise.
“Blackstone has helped drive the success of some of the most iconic franchise businesses globally and we look forward to working with them to help make significant new investments going forward,” Cancro mentioned.
Blackstone, the world’s largest various asset supervisor with greater than $1.1 trillion in belongings beneath administration, has been on an investing spree in meals franchises this yr.
In February, Blackstone introduced an fairness funding in 7 Brew Espresso to spice up the enlargement of the drive-thru beverage enterprise.
In April, Blackstone agreed to purchase Tropical Smoothie Cafe, a franchiser of quick informal eating places, from PE agency Levine Leichtman Capital Companions.
“Blackstone has deep experience helping accelerate the expansion of high-growth franchise businesses and this area is one of our highest-conviction investment themes,” mentioned Peter Wallace, Blackstone senior managing director.
Blackstone’s earlier franchise offers embody the 2007 acquisition of Hilton Resorts and its funding in Servpro, a franchise within the cleanup and emergency restoration trade.
Guggenheim Securities, Morgan Stanley, and White & Case had been the advisers to Jersey Mike’s. Barclays, Financial institution of America, and Simpson Thacher & Bartlett suggested Blackstone on the deal.
