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Papa Murphy’s sold to Lee Equity Partners

VANCOUVER Wash. Lee Equity Partners, a New York-based private equity firm, has signed an agreement to purchase Papa Murphy’s International, the take-home pizza franchisor currently owned by Charlesbank Capital Partners.

Terms of the deal for the parent of the 1,200-unit Papa Murphy’s Take ‘N’ Bake Pizza chain were not disclosed in a statement Thursday. The transaction is expected to close in the second quarter.

Charlesbank has owned Papa Murphy’s since 2004 and began a sale process for the chain last November. Restaurant industry bankers and consultants recently said the bidding process was successful for the private-equity owner, as Papa Murphy’s garnered tremendous interest and high valuations because of its recent sales success, nearly 100-percent franchised model and expansion plans — three key attributes investors are looking for today.

Thomas H. Lee, president of Lee Equity Partners, said in a statement that his organization was impressed with Papa Murphy’s potential for growth.

“This is an outstanding brand with a strong management team,” he said. “We are very excited about the expansion possibilities into areas of the country where they have little or no presence today.”

Lee has been involved in a number of high-growth consumer-oriented acquisitions, including Snapple Beverage Corp., General Nutrition Cos., PETCO Animal Supplies Inc., Ghirardelli Holdings Corp., Banana Boat and Sterling Jewelers Inc.

According to John Barr, chairman and chief executive of Papa Murphy's, the chain has seen its domestic systemwide sales increase by more than 63 percent since it was recapitalized by Charlesbank.

“Charlesbank has been a great value-added partner, and I credit much of our strong position in the current marketplace to their support over the years,” Barr said in a statement. “This new chapter with Lee Equity will undoubtedly benefit all of the brand’s stakeholders, including our franchisees, employees and vendors. I look forward to working together to provide an even stronger foundation for expansion and profitable growth.”

North Point Advisors and Wells Fargo Securities served as strategic consultants to Charlesbank and Papa Murphy’s on the transaction.

Contact Sarah E. Lockyer at [email protected].

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