Thomas H. Lee Partners to buy Fogo de Chão in deal valued at $400M

Thomas H. Lee Partners to buy Fogo de Chão in deal valued at $400M

Private equity firm Thomas H. Lee Partners LP said Tuesday it has agreed to buy the 25-unit Fogo de Chão chain from GP Investments Ltd.

GP Investments, based in Sao Paulo, Brazil, valued the deal for the full-service Brazilian-style churascarria chain at about $400 million. The companies said they expect to close the deal in the third quarter.

Boston-based Thomas H. Lee Partners, or THL, was part of a group that bought Dunkin’ Brands Inc. and took it public in 2011.

Jeff T. Swenson, managing director of THL, said in a statement that the private equity firm had “tremendous respect for Fogo's innovative dining experience and unparalleled commitment to customer service and quality.”

Larry Johnson, chief executive of Fogo de Chão, which is headquartered in Dallas, added, “With three new restaurants opened in the past 12 months, Fogo has charted a compelling growth path.”

J.P. Morgan and Jefferies Finance LLC are providing financing for the transaction. Jefferies & Co. Inc. acted as financial advisor to THL, and Weil, Gotshal & Manges LLP acted as its legal advisor. J.P. Morgan acted as financial advisor and Davis Polk & Wardwell LLP acted as legal advisor for Fogo de Chao.

GP Investments, which is publically traded, acquired full ownership of Fogo de Chão last August [3]. GP Investments, through its private equity fund GP Capital Partners III LP and other investors, had held a 35 percent stake in Fogo de Chão since 2006. With the purchase of the remaining 65 percent, GP Investments valued the equity in Fogo de Chão at $95 million.

RELATED: Fogo de Chão founder Jair Coser talks growth [4]

Fogo de Chão was founded in 1979 in Southern Brazil and opened its first U.S. unit in 1997. The company has U.S. locations in: Atlanta; Austin, Texas; Baltimore, Md.; Beverly Hills, Calif.; Chicago; Dallas; Denver; Houston; Indianapolis, Ind.; Kansas City, Mo.; Miami; Minneapolis, Minn.; Philadelphia; San Antonio; Scottsdale, Ariz.; Washington, D.C.; Las Vegas; and Orlando, Fla.

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