Financing

Real Mex Restaurants’ new owner names Randy Sharpe CEO

Ned Algeo was also named CFO of FM Restaurants, which acquired the owner of El Torito and Chevy’s Fresh Mex for $47 million out of bankruptcy.
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FM Restaurants HoldCo, which recently acquired Mexican casual-dining chain operator Real Mex Restaurants out of bankruptcy court, on Monday named Randy Sharpe its new CEO.

The company, a subsidiary of private-equity firm Z Capital, also named Ned Algeo chief financial officer.

A federal bankruptcy court in Delaware last week approved Z Capital’s $47 million purchase of Real Mex, which operates El Torito, Acapulco and Chevy’s Fresh Mex. No other buyer stepped in with a bid for the company.

Sharpe comes to FM from Romano’s Macaroni Grill, where he had been senior vice president of operations. He had previously been Real Mex’s vice president of operations.

Algeo had been Real Mex’s senior director of finance and interim CFO from 2016 through June 2017. He was most recently vice president of finance for telecommunications infrastructure company Mobillite.

James Zenni, CEO of Z Capital, in a statement called Sharpe and Algeo “the right people to build out the FM Restaurants team.”

He said the firm and its two newest executives will “look to expand key brand initiatives, complete strategic acquisitions and grow our national footprint,” suggesting that FM and Z Capital will look for additional acquisitions.

Real Mex Restaurants made its second bankruptcy filing in August, blaming higher-than-normal litigation costs, consistent financial losses and a failed effort to acquire Garden Fresh Restaurant Corp. last year.

The company had nearly $240 million in secured debt when it filed, including $42 million in first-lien debt that gets paid first, meaning that nearly all of the second-lien debt is being wiped out with the bankruptcy.

Real Mex has shrunk to 68 locations from the 128 it had in 2012 when it emerged from its previous bankruptcy filing.

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