Jersey Mike’s Subs, a leading franchisor of fast-casual submarine sandwich stores known for fresh grilled subs, announced it has reached an agreement under which private equity funds managed by Blackstone – led by Blackstone’s most recent flagship private equity vehicle – will buy a majority ownership position in Jersey Mike’s. While the official figure was undisclosed, sources with The Wall Street Journal reported the deal was valued at $8 billion.
Jersey Mike’s Founder and CEO Peter Cancro will be maintaining a significant equity stake and continue to lead the business. And this partnership with Blackstone is intended to help enable Jersey Mike’s accelerate its expansion across and beyond the U.S. market, and its continued investment in technology and digital transformation. Blackstone has a history of propelling the growth of many franchisors, including in its previous acquisitions of Hilton Hotels and SERVPRO along with the recently invested in Tropical Smoothie Cafe and 7Brew.
Cancro started working at the company’s original Point Pleasant, New Jersey location at the age of 14, which was founded in 1956 as Mike’s Subs. And he acquired the location in 1975 at age 17 and began franchising units in 1987. Jersey Mike’s is now a premier national franchisor with over 3,000 locations nationwide open and in development, and continues to be recognized for its freshly prepared submarine sandwiches, and passion for its authentic products and customers.
Giving back is also core to Jersey Mike’s mission as the company recently completed its 14th Annual Month of Giving, passing $113 million raised for local charities since 2011. And it has also launched the Coach Rod Smith Ownership program, which helps provide store-level managers greater opportunities to become Jersey Mike’s franchise owners.
The deal is expected to be completed in early 2025 subject to the satisfaction of certain closing conditions, including applicable regulatory approvals. And Blackstone’s private equity strategy for individual investors is also expected to invest as part of the transaction.
Guggenheim Securities and Morgan Stanley are acting as financial advisors and White & Case served as legal counsel to Jersey Mike’s. And Barclays and Bank of America are acting as financial advisors and Simpson Thacher & Bartlett served as legal counsel to Blackstone.
KEY QUOTES:
“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. 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.”
– Peter Cancro, Jersey Mike’s Founder and CEO
“Jersey Mike’s has grown for more than half a century by maintaining an unrelenting focus on quality (and delicious sandwiches) – consistently building on its loyal customer base as it has scaled nationwide. Blackstone has deep experience helping accelerate the expansion of high-growth franchise businesses and this area is one of our highest-conviction investment themes. We are excited to partner with an entrepreneur of Peter’s caliber and the talented Jersey Mike’s team. Our capital and resources will help support key investments in growth and technology for the benefit of Jersey Mike’s customers and exceptional franchisees. I highly recommend the #13 Original Italian, Mike’s Way.”
– Peter Wallace, a Senior Managing Director at Blackstone
