Cava Group Inc. completed its acquisition Wednesday of Zoes Kitchen, creating a privately held Mediterranean fast-casual company with some 340 units and more than 8,000 employees.
The $300 million deal, first announced in August, was financed by a “significant equity investment” from Act III Holdings, the emerging brand-accelerator financing group created by former Panera Bread CEO Ron Shaich.
Shaich becomes chairman of the combined company and Brett Schulman becomes CEO. Kevin Miles, who became CEO of Zoes Kitchen in 2009, is no longer with the company.
The combined business officially begins operations Thursday, ending Zoes Kitchen’s four-year tenure as a publicly traded company.
Zoes Kitchen’s sales had been declining in recent quarters, with comps falling some 7% in the early weeks of the third quarter of this year, making a buyout offer especially attractive.
Taking Zoes Kitchen public will free it from shareholder scrutiny, Schulman toldRestaurant Business shortly after the deal was announced.
“It’s just more challenging to do it under the public lens,” he said, citing Cava’s growth as an example. “It’s not that you can’t do it. It’s just more challenging.”
The deal will fuel expansion of the Mediterranean fast-casual brands.
“With this acquisition, Cava will be able to broaden our geographic footprint and meet the needs of even more guests,” Schulman said in a statement. “As part of the Cava family, Zoes Kitchen will benefit from Cava’s track record of bold culinary innovation and leveraging data and technology to drive growth and convenience.”
The new company is headquartered in Washington, D.C., Cava’s home, and will keep a “meaningful presence” in Plano, Texas, where Zoes Kitchen began in 1995.
“The Zoes Kitchen brand will remain intact for the foreseeable future,” the company said Wednesday.