Financing

Private equity firm to sell Jack’s Family Restaurants

Onex Group said it has a deal to sell the Alabama-based chain to an undisclosed buyer and triples its investment.
Photograph courtesy of Jack's

Onex Group, a Toronto-based investment fund, has sold Birmingham, Ala.-based Jack’s Family Restaurants, the firm said Friday.

Deal terms, including the identity of the buyer, were not disclosed. 

A source with knowledge of the negotiations said that AEA Investors won the bidding for Jack’s. A representative for the private equity firm would not comment.

The sale has nevertheless worked out well for Onex.

The fund said that it made a total equity investment of $234 million when it bought the chain in July 2015.

Just four years later, Onex said it will have received $835 million in proceeds from the transaction, including the sale price and $106 million in dividend distributions. That’s 3.6 times its original investment.  

“Over the course of our investment, Jack’s significantly accelerated its growth and brought its differentiated concept, high-quality food and exceptional customer service to new communities across the southern U.S.,” Matt Ross, a managing director at Onex, said in a statement.

Jack’s has quietly been a strong regional growth chain. The company was put up for sale earlier this year. It operates 160 locations, most of which are company-owned, and generated $163.3 million in U.S. system sales in 2018, according to data from Restaurant Business sister company Technomic. That was up 7.1% from the previous year.

Todd Bartmess, Jack’s CEO, said in a statement that Onex’s support “has allowed us to continue to invest in our people, technology and the growth of the brand.”

Jack’s is one of a number of chains that have been for sale in recent months. Cooper’s Hawk Winery & Restaurants recently agreed to a sale to Ares Management. Restaurants Unlimited filed for bankruptcy to prompt a sale.

Chains such as Perkins & Marie Callender’s and Church’s Chicken are on the block. Whataburger was recently sold, and Red Robin just this week received an unsolicited acquisition offer.

UPDATE: This story has been updated with additional information.

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