Butterfly, a Los Angeles-based private equity firm, has closed a $527 million single-asset continuation fund to extend its partnership with QDOBA Restaurant Corporation. The fund, led by Apollo’s Sponsor and Secondary Solutions business, will accelerate the growth of QDOBA, a leading Mexican fast-casual franchisor with over 800 locations.
Since acquiring QDOBA in 2022, Butterfly has transitioned the company to a franchise-first model and strengthened its management team. The new funding will provide liquidity for existing investors and support QDOBA’s long-term growth plans, including a robust pipeline of new restaurant development.
Advisors/counsel: Evercore served as exclusive financial advisor to Butterfly, Kirkland & Ellis served as legal counsel to Butterfly, and Weil Gotshal served as legal advisor to Apollo S3.
KEY QUOTES:
“QDOBA is the best-kept secret in the restaurant industry. With mid-single digit comp sales in each of the past three years and projected 10% annual new unit growth, QDOBA is now one of the fastest growing national restaurant brands in America. Given this trajectory, we expect to double QDOBA’s system sales over the next five years, and I honestly can’t think of a better partner than Butterfly to help us unlock our full potential.”
John Cywinski, CEO of QDOBA
“We are proud of the success that QDOBA has achieved since our original investment, but we are even more thrilled to double down on our partnership with John and his incredible team as they embark on this next stage of growth. Mexican fast-casual remains one of the highest growth and most attractive categories within the broader restaurant sector, and we are excited to continue backing the category-leading franchisor for years to come.”
Adam Waglay, Co-Founder and Co-CEO of Butterfly
“This transaction marks our first continuation fund and highlights Butterfly’s ability to remain creative in the current market to deliver attractive liquidity options for our investors while supporting the ongoing growth of our portfolio companies. We are very grateful for the enthusiastic support we have received in this transaction, which we believe is a win-win-win for the company, its existing investors and our new partners in the continuation fund.”
Peter Tang, Chief Financial Officer and Managing Director of Butterfly
“We are pleased to partner with Butterfly and lead this transaction, which enables Apollo S3 to invest in QDOBA, a clear category leader, and a business which Apollo funds have successfully invested in previously. We have been impressed by the progress that Butterfly has made in positioning QDOBA for sustained growth and believe the depth and breadth of the Apollo platform enables us to execute bespoke transactions like this across a variety of sectors and asset categories.”
Steve Lessar, Apollo Partner and Co-Head of S3
