Private equity takes bite of Cheddar’s

Private equity firms Catterton Partners and Oak Investment Partners bought Texas restaurant chain Cheddar’s from Brazos Private Equity Partners.

Private equity was on both sides of a deal to buy the popular Texas restaurant chain Cheddar’s, with Catterton Partners and Oak Investment Partners forking over an undisclosed sum to Dallas-based Brazos Private Equity Partners.

Cheddar’s Casual Café owns the Cheddar’s and Fish Daddy’s Grill brands, with 55 restaurants in 15 states, half owned by Cheddar’s and half owned by franchisees. Sales of all restaurants were approximately $245 million (€191.5 million) last year.

Catterton and Oak Investment will be equal partners in the company, with each owning 50 percent. The two Connecticut-based firms are no strangers to restaurant development, having previously co-invested in such chains as P.F. Chang’s China Bistro, Baja Fresh Mexican Grill, Caribou Coffee and La Madeleine French Bakery Café. Separately, Catterton put its money into First Watch Restaurants and the beverage company Odwalla, while Oak invested in Jamba Juice, Potbelly Sandwich Works and Whole Foods. Catterton has $2 billion (€1.6 billion) under management, while Oak has $8.4 billion (€6.6 billion).

Doug Rogers and Greg Good, respectively the president and COO of Cheddar’s, will stay on in their present roles, and each has reinvested a portion of his equity into the acquisition. Brazos and members of Cheddar’s management had acquired the company in November 2003. Since then, Irvine, Texas-based Cheddar’s has gained 13 restaurants nationwide and an additional $95 million in annual sales.