Financing

Ares Management invests in Cooper’s Hawk

The deal is expected to help fuel the chain’s continued growth.
Photograph courtesy of Cooper's Hawk

The private equity arm of Ares Management Corp. has made an investment in Cooper’s Hawk Winery & Restaurants, the companies announced on Tuesday.

Terms of the deal were not disclosed, but sources and previous reports suggested the company received a valuation of up to $800 million and a multiple of more than 20 times earnings before interest, taxes, depreciation and amortization.

Existing management, notably Tim McEnery, is remaining with the brand and retains a “meaningful” equity interest in the company.

“Tim McEnery conceived of a disruptive restaurant concept and lifestyle brand,” David Kaplan, co-founder of Los Angeles-based Ares Management and global co-head of its private equity group, said in a statement. “Tim’s vision has resulted in an incredibly passionate consumer following, driving industry-leading growth and unit economics.”

The investment “follows Ares’ strategy of supporting best-in-class growth businesses.”

In Cooper’s, Ares is getting one of the hottest restaurant chains in the United States. System sales have tripled over the past five years, according to data from Restaurant Business sister company Technomic.

The Woodridge, Ill.-based chain generated $282.3 million in system sales and operated 35 locations in 2018, according to Technomic. Both numbers were up nearly 17% from the previous year. Cooper’s currently operates 36 locations but is expected to have 41 by the end of the year.

Cooper’s Hawk also boasts a wine club that has nearly 400,000 members. Those members have formed a loyal base of customers that visits the restaurant more frequently and take part in regular, special events.

Cooper’s has been working to increase those members’ benefits, even letting them pay for their meals with a signature.

McEnery in a statement said the funds will help the company speed its growth. “With the significant resources across the Ares platform, we believe together we can accelerate our growth trajectory while maintaining our relentless focus on delivering a tremendous experience and value proposition to our wine club members and guests,” he said.

The deal ends a nine-year investment from KarpReilly, which had a minority stake in Cooper’s. North Point Advisors was Cooper’s financial adviser and Ropes & Gray was legal counsel. BofA Merrill Lynch was Ares’ financial adviser while Kirkland & Ellis and David Wright Tremaine were legal advisers.

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