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Portillo's agrees to investment by Berkshire Partners

Portillo's agrees to investment by Berkshire Partners

Terms were not disclosed, but some reports indicate an outright acquisition

The parent to the Portillo’s Hot Dogs chain has agreed to a strategic investment by private equity firm Berkshire Partners, the company said Tuesday.

Terms of the deal were not disclosed, but the investment will help grow the 38-unit chain, as well as Barnelli’s Pasta Bowl. Both brands are operated by Chicago-based The Portillo Restaurant Group Inc.

Portillo’s founder Dick Portillo said in a statement that he was “seeking an experience partner that shared our vision for the company and an appreciation for our culture. After careful consideration, Berkshire Partners proved to be the best choice. I look forward to working together to further strengthen our company.”

Reuters reported Tuesday that the deal was an outright acquisition for close to $1 billion, citing unnamed sources. Neither Portillo’s nor Berkshire Partners responded to requests for comment.

Portillo’s has been a Chicago hot dog favorite since it was founded in 1963. Most of the chain’s restaurants are in Illinois, with locations in Indiana, California and Arizona, according to the company’s website.

The nine-unit Barnelli’s Pasta Bowl chain operates only in Illinois. The pasta concept also features salads, ribs and sandwiches.

On its website, the Portillo Restaurant Group also lists the two-unit Honey-Jam Café concept, along with the single-unit Luigi’s House & Julian’s Piano Bar.

The investment, which the company declined to characterize, is not the first in the restaurant space for Boston-based Berkshire Partners, which is currently investing from a $4.5 billion fund raised in 2011. Prior investments include Papa Gino’s and it’s D’Angelo’s concept. Other brands within Berkshire Partners’ portfolio include Aritzia, a young women’s clothing retailer, Citizens of Humanity jeans, the Farm Boy grocery chain and Fresh Start Bakeries, which provides buns and other products to McDonald’s.

Josh Lutzker, Berkshire Partners’ managing director, said in a statement that Portillo’s is a highly differentiated restaurant with a passionate customer base.

“In addition to great food, the Portillo’s name stands for quality and service,” Lutzker said. “We are looking forward to working with Dick and his management team to uphold their culture of excellence. We see great potential in the business and share Dick’s vision to methodically expand operations in Chicago and beyond.”

Piper Jaffray acted as financial advisors to The Portillo Restaurant Group and Kirkland & Ellis LLP served as legal counsel. For Berkshire Partners, UBS acted as financial advisor and Weil, Gotshal & Manges LLP served as legal counsel.

This article has been revised to reflect the following correction:

Correction: July 2, 2014
  An earlier version of this story mischaracterized Berkshire Partners’ experience in the restaurant space. The firm’s prior investments include Papa Gino’s and its D’Angelo’s concept.

Contact Lisa Jennings at [email protected].
Follow her on Twitter: @livetodineout

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