Blackstone Inc., the New York City-based private-equity company, has agreed to buy restaurant chain Tropical Smoothie Cafe for a reported $2 billion, including debt, the companies announced late Wednesday
Blackstone said the deal for Atlanta-based fast-casual Tropical Smoothie Café LLC would be “the first transaction from Blackstone’s most recent vintage of its flagship private-equity vehicle.”
Terms of the transaction were not disclosed, but sources told the Wall Street Journal it was "about $2 billion, including debt."
Blackstone had previously acquired such franchisors as Hilton Hotels and ServPro.
Tropical Smoothie Cafe was founded in Destin, Fla., in 1997, and has grown to more than 1,400 locations in 44 states. It added 175 new restaurants in 2023, with 70% of those from existing franchisees, Blackstone said.
Peter Wallace, a senior managing director in Blackstone’s Private Equity business, said in a statement, “Tropical Smoothie Cafe has had an impressive growth trajectory consistently building on its loyal customer base as it has scaled nationwide. Blackstone has deep experience helping accelerate the expansion of leading franchise businesses as one of our highest-conviction investment areas.”
Charles Watson, CEO of Tropical Smoothie Cafe, said, “The key to this business is delivering an outstanding experience for each guest who walks through our doors. From high-quality products to exceptional guest service, our franchisees make our mission to become a beloved brand a reality day in and day out, and we are thrilled to see how the brand will continue to grow with Blackstone’s outstanding global resources behind it.”
Barclays served as financial adviser and Simpson Thacher & Bartlett LLP served as legal counsel to Blackstone. Baird served as the lead financial adviser, with support from North Point and BofA Securities, and Kirkland & Ellis LLP served as legal counsel to Tropical Smoothie Cafe.
Reuters had reported in December, citing sources, that Levine Leichtman Capital Partners, the private-equity owner of Tropical Smoothie, was preparing to put the chain up for sale for around $2 billion.
Levine Leichtman bought the fast-casual Tropical Smoothie brand in September 2020.At the time, Tropical Smoothie Cafe franchised more than 870 fast-casual restaurants in 44 states,
In a first-quarter earnings call April 18, Steve Schwarzman, Blackstone’s chair and CEO, said: “Our portfolio is concentrated in compelling sectors and we have the industry's largest dry powder balance of nearly $200 billion to take advantage of opportunities.
“Our long-term capital provides the flexibility and firepower to invest while affording us the patience to sell assets when the time is right,” Schwarzman said.
Contact Ron Ruggless at [email protected]
Follow him on X/Twitter: @RonRuggless