MidOcean to aquire Italian restaurant chain Sbarro

The management team of the quick-service Italian food chain, led by restaurant industry veteran Peter Beaudrault, will remain in place following the transaction as the firm undertakes a global expansion of the Sbarro’s franchise.

MidOcean Partners, a New York- and London-based private equity firm, has agreed to acquire Sbarro, a quick service Italian restaurant chain based in Melville, NY, for an undisclosed amount, MidOcean said in a statement. An SEC filing shows the purchase price to be $450 million (€342 million).

Peter Beaudrault, Sbarro

Sbarro’s management team will remain in place following the transaction, with Peter Beaudrault continuing as president and chief executive officer, the statement said. Beaudrault is a veteran of the restaurant industry and formerly served as the president and chief executive officer of Hard Rock Café International and held executive positions at TGI Friday’s Inc. He joined Sbarro in 2004.

Northpoint Advisors served as Sbarro’s advisors, the statement said. Credit Suisse and Bank of America will provide the financing for the deal.

Sbarro also has plans for international expansion, the company announced in a separate statement. In the past year, the company has made plans to add approximately 200 new restaurants in India, Mexico, Egypt, Central America, The Bahamas and Romania and recently signed an “international development agreement” with Qatar-based Wataniya Restaurants, a company that obtains franchise rights, to open approximately 50 restaurants over the next 10 years. “The franchises will be located in Middle Eastern countries that are experiencing rapid growth and development – Qatar, the United Arab Emirates, Bahrain and Kuwait,” the statement said.

Ten of the new restaurants, which will be located in new shopping malls and airports, will open by the end of 2009, the statement said, adding that the company will strive to adjust to its clients’ tastes. “While Sbarro menus in the Middle East will mirror the company’s 200-item menu in the United States, adjustments will be made to suit the cultural and religious needs and preferences of a primarily Muslim consumer base,” the statement said.

Founded 50 years ago by the Sbarro family, the company has 11,000 employees and 1,000 restaurants in shopping centers, airports, universities, hotels, stadiums and hospitals in 34 countries worldwide, including the UK, Canada, Russia Puerto Rico and Israel.

Led by chief executive officer Ted Virtue, MidOcean Partners is a middle-market private equity firm that targets companies in the consumer and leisure, media and communications, industrial, and business and financial services sectors. It was spun out of Deutsche Bank in 2003. The firm sold its interest in Thompson Publishing Group, a subscription-based information services provider, to Avista Capital Partners for an undisclosed amount last week.