Saladworks has been acquired out of bankruptcy by Centre Lane Partners, a New York City-based private-equity firm, the company said Monday.
Centre Lane agreed to pay $16.9 million for the 108-unit chain, including $15 million in cash and $1.2 million into a “brand development fund,” in addition to assumed liabilities, according to court documents.
Saladworks president Paul Steck, who has been with Saladworks for 12 years, has been named president and CEO. He replaces John Scardapane, who owned 70 percent of the company.
“We’re proud to be affiliated with Centre Lane, a private-equity firm known for aligning itself with businesses that hold the lead market positions in their categories and offer strong growth potential,” Steck said in a statement. “Moreover, we’re excited about what their support and investment means in terms of growth of the brand, expanded product and service offerings to our customers and additional support to our franchisees.”
Centre Lane’s $1.2 million in investment will be used to help support various efforts to promote Saladworks’ growth, including a new restaurant design, menu improvements and increased support for franchisees. The company plans to increase staff at its home office by more than 40 percent over the next six months.
Conshohocken, Pa.-based Saladworks was founded in 1986 operates a fast-casual franchise that serves fresh, tossed salads.
“Saladworks was the creator of the fresh-tossed salad restaurant concept, and from the beginning has been committed to offering consumers an exciting dining option that had previously been unavailable — fresh, fast and convenient food offerings that fit today’s healthier lifestyles,” Mayank Singh, managing director at Centre Lane, said in a statement.
“For us, this type of focus and commitment is the hallmark of a wise business investment and we look forward to partnering with Saladworks to support the company’s growth and success,” he said.
In 2008, Scardapane sold 30 percent of Saladworks to Vernon Hill, the founder of Commerce Bancorp. In 2013, Hill resigned from Saladworks’ board of directors and exercised his right to have the company buy his shares back for $7.8 million. In October 2014, Hill sued the company over the agreement. Metro Bank also sued Saladworks in December 2014 over $2.5 million in debt.
Saladworks filed for bankruptcy in February and put itself up for sale, citing lawsuits from the company’s bank and its minority owner. The company had $8 million in unsecured debt. Centre Lane was the stalking horse bidder in the auction, meaning that any bidder would have had to top its bid to qualify.
Centre Lane targets companies with between $20 million and $500 million in revenue that have “leading market positions and sustainable competitive advantages in their respective niches.” The firm targets any potential industry.
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