Church's Chicken has flown Arcapita's coop. The Bahrain-based investment firm sold the 1,600-unit chicken chain to an affiliate of Friedman, Fleischer & Lowe, a San Francisco private equity firm, for a reported $400 million. It's the first leveraged buyout of more than $100 million in nearly a year.
A group of lenders are financing the deal (which hadn't closed at press time), including Bank of America, Golub Capital and Wells Fargo, which arranged a $150 million loan to back the buyout.
While that clearly means there is life in the credit markets, the deal also signals confidence in Church's strength. CEO Harsha Agadi spoke of 700 more stores in the pipeline.
In the five years Arcapita has owned Church's, the chain has seen its earnings grow 60 percent. "Given the very constrained credit environment, as well as the sustained economic downturn, this announcement is a significant achievement for Arcapita and our investors," said Atif A. Abdulmalik, Arcapita's CEO. Agadi will remain Church's CEO.
