An investor group led by Chicago-based private-equity firm Victory Park Capital acquired deep-dish pizza chain Giordano’s out of Chapter 11 bankruptcy for $61.6 million, according to reports from the Chicago Tribune and Crain's Chicago Business.
The auction for the assets of Giordano’s Enterprises LLC, also based in Chicago, concluded after midnight Wednesday morning.
Chicago-based Origin Capital Partners, also a private equity firm, also is involved with the winning investor group.
Other parties that had expressed interest in bidding for Giordano’s during the brand’s 10-month stint under bankruptcy protection included John and Eva Apostolou, who had owned Giordano’s since 1988; a group of Giordano’s franchisees; and principals of rival chain Connie’s Pizza.
The Connie’s Pizza principals entered a $26 million “stalking horse” bid last month for Giordano’s restaurant assets, not including real estate. Giordano’s trustee, attorney Philip Martino of Quarles & Brady LLP, listed the assets for bid as five company-owned restaurants, five joint-venture locations, franchise agreements for 40 locations, Giordano’s intellectual property, and 20 parcels of real estate associated with corporate and franchised restaurants.
A call to Victory Park Capital for comment had not been returned at presstime.
At the time of Giordano’s Feb. 16 bankruptcy, John Apostolou said the filing resulted not from poor sales or traffic at the brand’s 47 restaurants but from the downturn in the real estate market. The Apostolou family filed for bankruptcy protection for all of its holdings simultaneously — including Giordano’s Enterprises — when the family’s real estate holding company, Randolph Partners LLC, could not sell or lease properties it owned in Illinois and Florida, where real estate values fell precipitously.
The Apostolous defaulted on their loans from principle lender Fifth Third Bank, which was owed $45.5 million at the time of the bankruptcy filing.
Martino told the Chicago Tribune that he expects total sales of Giordano’s assets to fetch $65 million, leaving enough money for other unsecured creditors once Fifth Third gets its money back. He said the final price paid for Giordano’s flagship location at Rush and Superior Streets in Chicago was $16 million.
After the auction proceedings, Martino said, the investment group that purchased Giordano’s agreed to sell the real estate associated with a franchised location in Rockford, Ill., to that restaurant’s owners.
Giordano’s was founded in 1974 by brothers Efren and Joseph Boglio, who sold the chain to the Apostolous in 1988. According to its website, the brand has 47 restaurants in Illinois and Florida.