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Captain D's sold to Sentinel Capital

The Captain D’s quick-service seafood chain has been acquired by Sentinel Capital Partners, the brand’s third private-equity owner in four years.

Terms were not disclosed. But the deal was Sentinel’s ninth acquisition of a restaurant company over the years, and gives the private-equity firm a growing competitor in the fast-seafood space.

Captain D’s operates 303 restaurants and franchises another 227 in 21 states. It was founded in 1969 as a second growth vehicle for Shoney’s, and has recently passed through a succession of owners. The concept was sold by Sun Capital Partners to Centre Partners in 2013.

Captain D’s generated $544 million in U.S. system sales in 2016, up 2.3% over 2015, according to Technomic data, and has continued that growth in 2017 with at least 14 new units.

“Captain D’s holds a unique market position,” John McCormack, a Sentinel senior partner, said in a statement. “Captain D’s continues to attract younger guests and is the clear category leader. Moreover, its same-store sales growth over the past decade is in the very top QSR tier regardless of category.”

Captain D’s CEO is Phil Greifeld, a 22-year quick-service industry veteran who has led the chain for the past seven years.

He said that Sentinel’s experience in the restaurant franchising sector “makes the firm an ideal partner for us as we enter a new phase of expansion.”

“We see significant opportunities to grow inside our existing footprint as well as new regions,” Greifeld said. “Our brand has never been stronger.”

Sentinel over the years has acquired and/or sold Taco Bell operator Border Foods, Church’s Chicken franchisee Falcon Holdings, Fazoli’s, Checkers/Rally’s, Huddle House, Newk’s Eatery and TGI Fridays, and Pizza Hut operator Southern California Pizza Co.

Sentinel sold Checkers in April in a $525 million deal.

The acquisition is the 34th restaurant chain acquisition this year. Buyers, including private-equity groups and other investment firms, along with strategic acquirers, are scooping up chains at a breakneck piece. Low interest rates, along with growth demands by investors and corporate shareholders, are fueling demand for acquisitions.

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