Pollo Tropical, the fast-casual chicken chain that operates mostly in Florida, on Monday said it has agreed to be sold to Authentic Restaurant Brands (ARB), a multi-concept operator run by a pair of former Restaurant Brands International executives, for $225 million.
ARB, owned by the private equity firm Garnett Station Partners, is paying $8.50 per share for Fiesta Restaurant Group, the Dallas-based owner of the 169-unit chain.
ARB operates Primanti Bros, P.J. Whelihan’s and Mambo Seafood. Its CEO is Felipe Athayde, who was president of Popeyes Louisiana Kitchen in 2019 when that chain introduced its chicken sandwich. Authentic’s chairman is former Tim Hortons president Alex Macedo.
They take over a brand in Pollo Tropical that several years ago appeared poised for big things but which has struggled to break out of its Florida home. System sales last year were $455 million, less than 5% more than where they were five years ago. The chain has shrunk by eight locations over that period, according to data from Restaurant Business sister company Technomic.
But existing units generate strong volumes. Average unit volumes were $2.8 million last year, up 20% over the past five years. Same-store sales have increased at least 8% in each of the past 10 quarters.
The brand’s stock, however, has been below $15 per share since 2019 and has typically hovered around $10. But the $8.50 per share ARB is paying is below the company’s 52-week high of $9.28 per share and represents only a modest premium on the $7.86 per share closing price on Friday.
“We have been fans of Fiesta and their Pollo Tropical restaurants for some time,” Macedo said in a statement. “Pollo Tropical restaurants are a mainstay on the dining scene throughout Florida, and we are confident that ARB is a perfect partner to harness the power of the brand for the future.”
The sale comes two years after Pollo Tropical’s parent, Fiesta Restaurant Group, sold Taco Cabana to Yadav Enterprises for $85 million. Both brands were owned for years by Carrols Restaurant Group, the large Burger King franchisee that spun them off in 2012.
“Fiesta and Pollo Tropical restaurants are a natural fit into ARB’s existing portfolio,” Matt Perelman, managing partner and cofounder of Garnett Station Partners, said in a statement. He cited the restaurants’ “storied heritage” and “deep-rooted connection with their local communities.”
The sale is expected to close by the end of the year. Pollo Tropical will be based in Miami and Fiesta will become a subsidiary of ARB.
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