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The Cheesecake Factory gets $200 million investment from private-equity firm Roark Capital.

Roark Capital invests $200 million in Cheesecake Factory

Private-equity firm gets seat on expanded board

The Cheesecake Factory Inc. has closed on a $200 million investment from affiliates of private-equity firm Roark Capital, the companies announced Monday.

The Calabasas Hills, Calif.-based Cheesecake Factory will expand its board from eight to nine directors. Paul Ginsberg, president of Roark, will take the new seat as an independent director, the companies said.

“This transaction not only meaningfully enhances our liquidity position to navigate the near-term COVID-19 landscape and get our affected staff members back to work as soon as practicable,” said David Overton, Cheesecake Factory CEO and chairman, in a statement, “but also importantly, solidifies our ability to manage the business for the long-term for all of our stakeholders once we emerge on the other side of this crisis.”

The Cheesecake Factory on April 2 said first-quarter same-store sales fell about 13% amid coronavirus restrictions imposed on in-store dining by states and cities, with March sales declining about 46%. The company also said it temporarily closed 30 units, including three Cheesecake Factory restaurants.

In July, Cheesecake Factory agreed to acquire Phoenix-based Fox Restaurant Concepts and buy the remaining interest in FRC’s casual-dining North Italia and fast-casual Flower Child concepts.

Ginsberg of Roark said, “We believe The Cheesecake Factory, North Italia and the FRC brands are uniquely positioned to maintain their leadership in experiential dining and look forward to a partnership with the board and management team to drive long-term value for all shareholders.”

Cheesecake Factory owns and operates 294 restaurants in the United States and Canada and licenses 26 restaurants abroad.

Atlanta-based Roark has invested in a wide array of restaurant brands. Under Inspire Brands, it owns Arby’s, Buffalo Wild Wings, Sonic and Rusty Taco. Under Focus Brands, it owns Auntie Anne’s, Carvel, Cinnabon, Moe’s Southwest Grill and Schlotzky’s and franchises Seattle’s Best Coffee. It also owns CKE Restaurants (Carl’s Jr. and Hardee’s), Corner Bakery Café, Culver’s, Jamba Juice, Jim ‘n Nick’s Bar-B-Q, Jimmy John’s, McAlister’s Deli, Miller’s Ale House and Naf Naf Grill.

In this convertible preferred investment deal, Wells Fargo Securities LLC and J.P. Morgan Securities LLC served as financial advisers and Latham & Watkins LLP served as legal adviser to The Cheesecake Factory. Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal adviser to Roark.

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

TAGS: Finance
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