Levine Leichtman Capital Partners (LLCP), a middle-market private equity firm, has partnered with management to buy Shipley Do-Nuts from Peak Rock Capital.
Houston-based Shipley is the nation’s largest donut and kolache brand, offering freshly-made daily donuts, kolaches, and coffee at over 375 locations across 14 states. With over 60 varieties of donuts and kolaches, Shipley has built a strong reputation during its nearly 90-year operating history for providing high-quality products and exceptional customer service. Shipley was founded in 1936 and is based in Houston, TX.
Since acquiring Shipley from the third generation of the founding family, Peak Rock has supported the company’s strategic growth and operational initiatives, including expanding into multiple geographies, developing new products, launching a marketing cooperative with franchisees, and establishing a new corporate headquarters and R&D lab. Under Peak Rock’s ownership, same-store sales grew for 18 consecutive quarters, and the company set records for new store growth.
Shipley is the fourth platform investment of Levine Leichtman Capital Partners VII, L.P. Across its funds, LLCP has extensive experience investing in the franchising industry, including prior investments in Tropical Smoothie Cafe, Nothing Bundt Cakes, and Hand & Stone. Shipley represents LLCP’s 18th franchising investment, encompassing a combined 32 brands across various industries.
The company will continue to be run from its Houston headquarters by the existing executive team led by CEO Flynn Dekker. The financial terms of the transaction were not disclosed.
Advisors: Kirkland & Ellis and DLA Piper served as legal counsel to LLCP on the transaction. And Shipley was advised by North Point and J.P. Morgan.
KEY QUOTES:
“We are excited to partner with Flynn and the outstanding Shipley management team, who have been executing on a successful growth strategy. Together, we see a tremendous opportunity to build on this foundation by expanding unit count even further to capture the substantial whitespace and driving strong same-store sales growth.”
Matthew Frankel, Managing Partner of LLCP
“Shipley has delivered robust recent growth and continues to build upon a strong reputation for fresh products and customer service that it established over its nearly 90-year operating history. Flynn and the rest of the management team have had tremendous success, and we are excited to leverage our extensive experience investing in the franchising space to pursue various growth initiatives alongside them.”
Greg Flaster, Managing Director at LLCP
“Shipley is growing faster than ever in its history, and partnering with LLCP presents an outstanding opportunity for Shipley to accelerate our growth and bring the world’s greatest donut to an even wider audience. Their extensive expertise in franchise food brands will be pivotal in driving future growth and supporting our franchisees, while preserving our commitment to fresh-made quality and our original recipes that have made our brand the icon it is today.”
“We have benefited greatly from our partnership with Peak Rock, and their approach has been key to unlocking Shipley’s impressive growth. We are committed to supporting our franchisees’ businesses and serving our customers the world’s greatest donut as we continue to introduce our iconic brand to more and more communities across the nation.”
Flynn Dekker
“We are proud of the success Shipley has achieved during our ownership and honored to have contributed to the evolution of this iconic brand. Our investments in people, processes and technology have propelled Shipley to achieve transformational growth. We have deeply appreciated the support of Company’s loyal customers, franchisees, employees, and the Shipley family.”
Robert Strauss, Senior Managing Director of Peak Rock
“It has been an outstanding experience working alongside the Shipley team. The Company has excelled through our investment and built a strong foundation to capitalize on future growth.”
Michael Graham, Managing Director of Peak Rock
“The Shipley transaction is another great example of Peak Rock’s track record of successfully partnering with family and founder-owned businesses to achieve transformational growth. Shipley also highlights Peak Rock’s deep expertise supporting franchisors in achieving their growth ambitions. We look forward to continuing to partner with similar businesses in the future that can benefit from our capabilities to achieve transformational outcomes.”
Anthony DiSimone, Chief Executive Officer of Peak Rock
