Fast-growing Tropical Smoothie is being sold to Blackstone

The smoothie chain, which has thrived in recent years, is being sold to the private-equity giant for $2 billion.
Tropical Smoothie has an apparent agreement to sell to Blackstone for $2 billion. | Photo: Shutterstock.

Tropical Smoothie Cafe, the fast-growing smoothie concept, is being sold to Blackstone, both the buyer and the seller confirmed on Wednesday.

The private equity firm announced late Wednesday that it has a deal to acquire the fast-casual smoothie chain, confirming earlier media reports indicating that a sale was imminent. The Wall Street Journal and Reuters earlier Wednesday said the deal values the chain at $2 billion.

Levine Leichtman put the Atlanta-based chain on the market last year, with a reported $2 billion asking price.

Blackstone is a massive investor and reportedly made a push this year to acquire Jersey Mike’s, at an apparent price tag of $8 billion. That deal never came to fruition, but Tropical Smoothie isn’t a bad consolation prize.

The chain, which serves a selection of smoothies, bowls, wraps and other items, operates about 1,400 franchised locations. It has also been one of the most consistently fast-growing chains in the U.S.

U.S. system sales last year neared $1.3 billion, according to Technomic Ignite data. That is more than twice the sales it generated in 2019.

A representative for Tropical Smoothie did not respond to a request for comment on Wednesday.

Still, the sale is another indication that the market for restaurant mergers and acquisitions is warming as more companies jump into the market and some buyers step in and snap up high-quality concepts.

The M&A market had been slow in recent years amid high inflation, weak profitability and high interest rates. But buyers are gravitating toward quality concepts.

Tropical Smoothie started as a single location in 1997 and has grown into the nation’s largest chain of smoothie shops. Blackstone has a long history of acquiring franchise brands, including Hilton Hotels and Servpro.

Peter Wallace, senior managing director in Blackstone’s private equity business, said in a statement that Tropical Smoothie has had an “impressive growth trajectory consistently building on its loyal customer base.”

The agreement also represents a successful exit for Levine Leichtman. The chain’s unit count has doubled in the time that private equity firm has owned the brand. “Charles Watson and the Tropical Smoothie Café team have been terrific partners during a period of rapid growth,” Matthew Frankel, managing partner at Levine Leichtman, said in a statement.

UPDATE: This story has been updated to include information from Blackstone and Levine Leichtman.

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