BOSTON The management of Au Bon Pain bakery-cafe chain has teamed up with the private-equity firm LNK Partners to buy a controlling interest in the brand’s parent company from another investment group for $100 million, the buyers said Wednesday.
Under terms of the agreement, Compass Group PLC will decrease its stake in the chain. Compass, the London-based contract feeding giant and Au Bon Pain franchisee, previously held a 25-percent share in the brand.
The sellers of the undisclosed majority stake include PNC Mezzanine Capital, a division of PNC Financial Services Group Inc. in Pittsburgh, and AlpInvest Partners NV.
“LNK is the ideal partner for Au Bon Pain at this stage of its growth,” said Sue Morelli, president and chief executive of the restaurant concern. The equity firm “will provide us with valuable strategic guidance and industry insights as we move forward.”
Morelli, who took Au Bon Pain’s reins in 2005, said the change in ownership would not affect the brand’s “controlled” growth plans. Au Bon Pain will continue to open outlets in its core trade channels, which include hospitals, airports, bus and train stations, office buildings and retail malls. It also plans to augment future expansion with openings in suburban locations, Morelli said. A second suburban outlet is scheduled to debut in West Hartford, Conn., later this year.
Morelli projected that Au Bon Pain would open 10 company-owned locations in 2008, while franchisees would add “a little more.”
The acquisition of Au Bon Pain does not mark LNK’s first foray in the foodservice business. The White Plains, N.Y.-based private-equity firm previously had been affiliated with Denny’s Corp., franchisor of the family segment’s largest player, and Panera Bread Co., a one-time sister but now rival brand of Au Bon Pain.
LNK partner Henry J. Nasella had served on the board of directors of Au Bon Pain Corp. prior to its spinoff of Panera and later sat on Panera’s board. Nasella is no longer affiliated with Panera, Morelli said.
Ron Schaich, Panera’s chief executive, and his late business partner Louis Kane had once led Au Bon Pain. They arranged a sale of the company to buy St. Louis Bread Co., which became Panera.
Au Bon Pain was purchased in 1998 by private-equity investor Bruckmann, Rosser, Sherrill & Co., which sold the brand to Compass in 2000 for $108 million. In 2005, Au Bon Pain’s management teamed up with PNC to purchase a 75-percent stake in the company for about $90 million.
Au Bon Pain operates or franchises 226 bakery-cafes worldwide. Its 2007 systemwide sales were $300 million, according to the sales announcement. Morelli said the chain has logged 33 consecutive quarters of positive comparable-store sales. Same-store sales were up 5 percent in the last quarter, she said.