Rubio’s is being sold to the company that owns its debt after no other bidders came forward for the fast-casual Mexican chain.
The buyer is TREW Capital Management, the investment firm run by former Famous Dave’s CEO Jeff Crivello.
The firm, which is also targeting the fast-casual burger chain BurgerFi, acquired Rubio’s debt on the secondary market at a discount and offered to exchange the full value of that debt, $40 million, for equity.
No other bidders were willing to pay more than $40 million for Rubio’s. This week, the company sent a notice to the court that it had accepted TREW’s offer and the auction was canceled.
Rubio’s had been struggling for years. It filed for bankruptcy in 2020 and restructured its debt but said the operating environment had grown too difficult, particularly in its home state of California.
The company abruptly closed 48 restaurants in the state and filed for bankruptcy again just days later. The closures left Rubio’s with 86 locations.
As CEO of Famous Dave's, Crivello quickly earned a reputation as an aggressive buyer of restaurant chains on the budget market, with deals for companies like Granite City, Perkins and Village Inn. Famous Dave’s was ultimately sold to the Canadian brand operator MTY Food Group.
He has picked up where he left off. He has created Ciao Hospitality Group, which operates the Minnesota-based Cowboy Jack’s chain, Berry Divine Acai Bowls and the Minneapolis concept Sally’s Saloon.
But TREW clearly has plans for more. It is set to be the buyer for Rubio’s and has the inside track on a potential acquisition of BurgerFi and its sister chain Anthony’s Coal-Fired Pizza after acquiring that debt on the secondary market.
It is one of several different investment firms that are buying up chains at discounts, either through the bankruptcy process or by acquiring the debt from their lenders. Fortress Credit, for instance, is acquiring Red Lobster. That company already owns SPB Hospitality, which operates Krystal and Logan’s Roadhouse, both of which were acquired in a similar fashion.
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