Skift Take
A Focus Brands IPO is long awaited, though the restaurant investor is not short on cash.
— Danni Santana
The owner of Carvel ice cream is ready for a float.
Roark Capital Group is considering an initial public offering for Focus Brands Inc., the franchisor of Carvel, Auntie Anne’s, Cinnabon and other eating chains, according to people familiar with the matter.
The Atlanta-based buyout firm has held preliminary talks with investment banks about an IPO for Focus in the first half of 2019 that could value the company at more than $1 billion, said the people, who asked to not be identified because the matter isn’t public. No decision has been made and Roark could elect to keep the business private, the people said.
A spokeswoman for Roark declined to comment. A representative for Focus did not respond to requests for comment.
Focus is the franchisor and operator of more than 6,000 eateries in more than 50 countries, peddling sandwiches, pretzels, ice cream, cinnamon rolls and other fast food, according to its website.
Its potential IPO has been a long time coming. Roark Capital assembled Focus through a dealmaking spree that stretches back to at least 2001, when it acquired ice cream franchiser Carvel Corp. for about $30 million.
It bought Cinnabon and the franchising rights of Seattle’s Best Coffee about three years later from AFC Enterprises Inc. It went onto buy McAlister’s Deli, Moe’s Southwest Grill, and Schlotzsky’s. It closed its most recent deal in September, taking juice chain Jamba Inc. private in a deal worth about $200 million.
Focus, based in Atlanta and led by Chief Executive Officer Steve DeSutter, generates about $100 million in annual earnings before interest, taxes, depreciation and amortization, the people said.
Roark Capital, which invests heavily in restaurants, has raised $6.5 billion for its newest funds, the company announced this month. The buyout firm also owns Inspire Brands Inc., the parent company of Arby’s that agreed to buy Sonic Corp. for $2.3 billion last month.
This article was written by Kiel Porter from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].
