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Fatz Cafe gets $40 million to refinance debt, spur growth

TAYLORS S.C. Fatz Cafe, the 45-unit casual-dining chain, plans to use a $40 million recapitalization to refinance its debt and fund expansion, the company and its financial sponsors said Tuesday.

The deal was completed this summer by private-equity firm Milestone Partners and executives of Fatz Cafe parent company Cafe Enterprises Inc. The debt financing was provided by GE Capital Solutions, Franchise Finance and Madison Capital Funding.

The financing consisted of a $35 million term loan to refinance debt and a $5 million revolver to build new units.

Cafe Enterprises is privately held and its restaurants are located throughout the Southeast. The Fatz Cafe brand was founded in 1988 with the tagline, “Where everyone’s a regular.” Chief executive Steve Bruce led the management investment and the company’s majority shareholder, Bill Burton, retired from his role as chairman as part of this transaction, but will remain a minority shareholder and board member, the companies said.

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