Armed with an equity infusion from BDT Capital Partners, Lou Malnati’s Pizzeria is looking to move outside of its Chicago hometown.
The private equity fund, which recently raised $3.5 billion, is making an equity investment in the 47-unit chain that specializes in Chicago-style deep-dish pizza.
The company said that it is making the deal to focus on growth “inside and outside” of Chicago, and that the deal with BDT will “strengthen Lou Malnati’s long term future in the restaurant business.” The companies did not disclose the amount of the investment.
“Our customers can expect the same quality and excellence in both product and hospitality that they have experienced over the past 46 years,” Marc Malnati, owner of the chain, said in a statement, “while BDT’s growth capital and valuable support will help our company achieve our long-term objectives.”
Lou Malnati founded the chain in 1971 and the concept grew to be one of the Chicago area’s favorites. Malnati died in 1978 and Marc, his oldest son, joined the family business. All but one of the chain’s locations is in the Chicago area, with one in Phoenix.
Marc Malnati will continue to be involved in the business operations and leadership. The deal is expected to close in October.
Lou Malnati’s becomes the latest Chicago-area concept to get private-equity dollars to fuel national growth, following Berkshire Partners’ investment in Portillo’s in 2014 and Roark Capital’s investment in Naf Naf Grill in 2015.
“BDT’s experience in advising and investing in family businesses and their network of successful family business leaders made this partnership a perfect fit for us,” Malnati said. “This is an exciting time for our company, knowing this partnership will strengthen us as a company and allow for pizzeria expansion and growth opportunities for our people.”