New York-based private equity firm Lee Equity Partners has signed a definitive agreement to purchase the nearly 1,200 unit Papa Murphy's Take 'N' Bake pizza chain from its current majority owner, Charlesbank Capital Partners. Terms of the deal are not being disclosed.
Spokesperson Lindsi Miller has confirmed that John Barr, chairman and CEO of Papa Murphy's, will remain with the company in the same capacity. Earlier this year, Barr, formerly president and COO of Quaker State Oil, said his continued reign depended on how much of a "good fit" a potential buyer had with his leadership style. The company announced the impending sale last November, but nothing of a potential buy.
Papa Murphy's officials said that the transaction will position the company for its next phase of growth, as it continues to seek new franchise owners and open locations, primarily in the Southwestern and Southeastern United States. The deal is expected to close in the second quarter of 2010, according to a company statement.
Since Papa Murphy's recapitalization by Charlesbank in 2004, the take ‘n' bake pizza pioneer has seen its domestic system-wide sales increase by more than 63 percent, according to John Barr, Chairman and CEO of Papa Murphy's.
"Charlesbank has been a great value-added partner, and I credit much of our strong position in the current marketplace to their support over the years," said Barr. "This new chapter with Lee Equity will undoubtedly benefit all of the brand's stakeholders, including our franchisees, employees and vendors. I look forward to working together to provide an even stronger foundation for expansion and profitable growth."
"John Barr and the management team have done a terrific job developing the company internally and fortifying its industry leadership position and strong franchise network," said Michael Eisenson, Charlesbank CEO. "This has been a rewarding investment for us, and we look forward to a very successful partnership between the company and Lee Equity Partners as the management team continues to execute their strategy for growth."
Indeed, Barr's six-year reign has pushed this take 'n bake leader to the top of its class. In 2008, it achieved the third-highest growth in estimated sales per unit among the country's 100 largest foodservice chains. That translated into four times the growth of its nearest competitor. And last year, a Zagat reader survey placed the chain with the likes of In-N-Out Burger, Chipotle and Panera Bread, as one of the top best-in-class chains nationwide.
Thomas H. Lee, president of Lee Equity Partners, said that his organization was impressed with Papa Murphy's potential for future growth. "This is an outstanding brand with a strong management team. We are very excited about the expansion possibilities into areas of the country where they have little or no presence today."
Lee has been involved in a number of high growth consumer-oriented acquisitions, including Snapple Beverage Corp., General Nutrition Companies, PETCO Animal Supplies, Inc., Ghirardelli Holdings Corp., Banana Boat, and Sterling Jewelers, Inc., among others.
North Point Advisors and Wells Fargo Securities served as strategic consultants to Charlesbank and Papa Murphy's on the transaction.
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