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PE group Advent buys majority stake in First Watch

Deal to support morning chain’s growth

The private equity firm Advent International on Thursday said it has agreed to buy a majority stake in the breakfast-and-lunch chain First Watch from Freeman Spogli & Co.

Terms of the deal were not disclosed. The transaction is expected to close in the “coming weeks. 

Company management “will retain a meaningful equity stake” in First Watch and will continue to lead the fast-growing University Park, Fla.-based chain, which has grown to more than 300 locations in 26 states. 

“First Watch is a fresh and modern restaurant concept,” Tricia Patrick, managing director at Advent, said in a statement. She said the chain “is strongly aligned with trends toward healthier eating and better ingredients, and positioned to not only grow within existing markets but also to expand the unique concept to guests in new geographies.”

First Watch operates chains under the First Watch and The Egg & I brands. The concepts are open from 7 a.m. to 2:30 p.m., seven days a week. It has locations predominantly in Florida, Texas, Ohio, Colorado and Arizona. 

“With Advent’s support, we look forward to deepening our connection with consumers, building on our core business of serving healthy, high-quality breakfast, brunch and lunch, and continuing our thoughtful approach to driving significant value,” CEO Kenneth Pendery said in a statement.

First Watch has grown aggressively in recent years, nearly tripling the number of locations while generating positive same-store sales for 33 straight years. The company has made aggressive acquisitions, notably the 2015 acquisition of The Egg & I.

“During our time together, the company has delivered industry-leading results, including 26 straight quarters of positive same-store sales, while increasing average unit volumes by 22 percent and nearly tripling EBITDA,” John Roth, CEO at Freeman Spogli, said in a statement. He referred to earnings before interest, taxes, depreciation and amortization.

Advent is a big private equity group that has invested more than $9 billion in 71 consumer and retail companies worldwide, including The Coffee Bean & Tea Leaf.

Contact Jonathan Maze at [email protected]

Follow him on Twitter: @jonathanmaze

Correction: July 31, 2017 A previous version of this article misstated the number of companies Advent International has invested in. This has been updated a second time. 

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