The Riverside Company has realised its investment in Australian F&B chain operator Retail Zoo in a secondary sale to Bain Capital and company management, according to separate statements from the firms.
Financial details of the transaction were not disclosed, but Riverside said during its ownership, the company’s earnings grew by 150 percent.
Riverside declined to comment on return information, however, Retail Zoo is expected to generate an estimated A$260 million ($242 million; €178 million) in network sales in the 12 months to June 2014, and “has a record of strong and consistent sales and EBITDA growth”, Bain said in a statement.
Riverside’s focus during the holding period was on international expansion and making add-on investments, Simon Feiglin, partner at Riverside told Private Equity International.
“[Retail Zoo] had one of best management teams I’ve ever worked with and we [wanted to] be able to leverage that,” he explained.
Retail Zoo owned two quick-service restaurant chains in Australia, namely Boost Juice and Salsa’s at the time of investment, with Riverside adding to its portfolio helping with the acquisitions of Cibo Espresso and Hatch.
The firm originally invested in 2010, with the exit marking its 100th worldwide since the firm’s founding in 1988 and the penultimate exit from its debut Asia vehicle. The firm has one Korea-based education company left in the fund.
Riverside is now investing from its second Asia vehicle, from which it has made three investments so far, and that closed on $235 million earlier this month, substantially above target. The firm invests in control opportunities in Asia’s developed economies, including Australia, Korea, Japan, Hong Kong, Singapore and Malaysia.
Bain Capital has teamed with management for the secondary buyout of Retail Zoo, its second major investment in Australia after buying accounting software firm MYOB in 2011.
However, Bain has extensive experience in the restaurant sector in Asia, counting Domino's Pizza, Dunkin’ Brands, Burger King and Bloomin' Brands among its similar portfolio companies.
“Retail Zoo is highly aligned with our Australia investment strategy – leveraging our global [quick-service restaurants] experience and a platform for international expansion. It participates in attractive QSR categories with leading market positions, very strong brands, solid customer relationships and numerous opportunities for further growth. We plan to work with the founders and management to build on their superb record of achievement,” Craig Boyce, managing director at Bain Capital, said in a statement.