Thanks, Sale-Leaseback! Arcapita Takes 2x Return on Church’s Chicken
Selling a company for less than you bought it for is typically a sign defeat. But thanks to a lucrative sale-leaseback, that's not the case for Arcapita's sale of Church's Chicken to Friedman Fleischer & Lowe. The firm made 2x its money net of all carried interest and fees. News of the sale itself shouldn't be a surprise to peHUB readers, since we first reported it on June 8. However, we didn't have the exact math. So here's how Arcapita earned twice its investment: The firm purchased the southern food chain from parent company AFC Enterprises in 2003 for $390 million. Immediately the firm sold the company's real estate in a sale-leaseback transaction, making $162.5 million. That technically makes the "true price" $227.5 million. The firm put in $82 million in equity and Suntrust Robinson Humphrey provided $160 million of debt financing.
