Blackstone announced this week that its private equity funds, managed by the firm, have entered into a definitive agreement to acquire Tropical Smoothie Cafe, a leading franchisor of fast-casual restaurants, from Levine Leichtman Capital Partners.
This deal would be the first transaction from Blackstone’s most recent vintage of its flagship private equity vehicle. It is intended to help accelerate Tropical Smoothie Cafe’s expansion through continued investment in menu innovation, operational efficiency, and innovative marketing.
Blackstone has a long history of propelling the growth of leading franchisors, including in the previous acquisitions of Hilton Hotels and SERVPRO. Tropical Smoothie Cafe started operating as a single location on a beach in Destin, Florida in 1997. It grew into a nationally recognized brand with over 1,400 locations in 44 states across the U.S. today.
Known for its smoothie and food offerings, the company opened over 175 new locations last year alone, 70% of which were opened by existing franchisees.
The terms of the deal were undisclosed but The Wall Street Journal’s sources suggested that it was for nearly $2 billion.
Barclays served as a financial advisor, and Simpson Thacher & Bartlett served as legal counsel for Blackstone. And Baird served as the lead financial advisor, with support from North Point and BofA Securities, and Kirkland & Ellis served as legal counsel to Tropical Smoothie Cafe.
KEY QUOTES:
“Tropical Smoothie Cafe has had an impressive growth trajectory consistently building on its loyal customer base as it has scaled nationwide. Blackstone has deep experience helping accelerate the expansion of leading franchise businesses as one of our highest-conviction investment areas. We believe our capital and resources will help position Tropical Smoothie Cafe for continued success and innovation for the benefit of its guests and franchisees.”
– Peter Wallace, a Senior Managing Director in Blackstone’s Private Equity business
“The key to this business is delivering an outstanding experience for each guest who walks through our doors. From high-quality products to exceptional guest service, our franchisees make our mission to become a beloved brand a reality day in and day out, and we are thrilled to see how the brand will continue to grow with Blackstone’s outstanding global resources behind it.”
– Charles Watson, CEO of Tropical Smoothie Cafe
