New York-based private equity firm Castle Harlan announced today that it has agreed to sell restaurant chain Charlie Brown’s to fellow New York buyout shop Trimaran Capital Partners for $140 million (€108 million).
The transaction, which is expected to close in the first quarter of 2005, will net Castle Harlan a return of approximately four times its investment.
Castle Harlan initially acquired Charlie Brown’s in 1997 for approximately $50 million. The investment was the first acquisition for Castle Harlan Partners III, a $630 million fund that closed in February 1997. According to Justin Wedner, senior managing director at Castle Harlan, Charlie Brown’s has doubled its revenues since the acquisition
Castle Harlan has been an active investor in the restaurant sector. In May 2004, the firm agreed to purchase Caribbean Restaurants, the operator of 165 Burger King restaurants in Puerto Rico, for $340 million from buyout firms Oak Hill Capital and American Securities Capital. Other portfolio companies owned by Castle Harlan include seafood chain McCormick & Schmick’s, Morton’s Steakhouses and West Coast family restaurant chain Marie Callendar’s.
Castle Harlan, founded in 1987, is currently investing its fourth fund, Castle Harlan Partners IV, which closed on $1.2 billion in August 2003.
Trimaran Capital, founded in 1995, is currently investing Trimaran Capital II, a $1 billion fund that closed in 2000. In October 2004, the firm invested $21 million in Educational Services of America, a provider of day school services to children with special education requirements. Charlie Brown’s represents the firm’s first investment in the restaurant sector.