News

Sentinel Capital Partners said Dec. 18 that it has acquired Captain D’s, the franchisor and operator of 530 Captain D’s restaurants in 21 U.S. states. Financial terms weren’t announced. UPDATE: Centre Partners, the seller, stands to make more than 3.3x their money with the deal, a source familiar said.

PRESS RELEASE

NEW YORK, December 18, 2017 – Sentinel Capital Partners, a private equity firm that invests in promising, lower middle market companies, today announced that it has acquired Captain D’s, the franchisor and operator of 530 Captain D’s restaurants in 21 U.S. states. Terms of the transaction were not disclosed.

The Captain D’s system consists of 227 franchised and 303 company-owned locations with established strongholds in the American Southeast and Midwest. Captain D’s is the nation’s leading restaurant operator in the underpenetrated quick service restaurant (“QSR”) seafood sector. With Captain D’s seafood menu based on ocean-caught fish and a beach-themed dining format, it is uniquely positioned in the QSR market, a sub category that has outgrown the broader restaurant industry since 2011.

“We are very excited to partner with Captain D’s highly-experienced and accomplished management team,” said John McCormack, a Sentinel senior partner. “Captain D’s holds a unique market position and was recently recognized as one of the top 10 brands in America for consumer loyalty. Captain D’s continues to attract younger guests and is the clear category leader. Moreover, its same-store-sales growth over the past decade is in the very top QSR tier regardless of category.”

Captain D’s CEO, Phil Greifeld, a 22-year QSR industry veteran who has led Captain D’s for the past seven years, commented, “Sentinel’s more than two decades of experience in the restaurant franchising sector makes the firm an ideal partner for us as we enter a new phase of expansion. We see significant opportunities to grow inside our existing footprint as well as into new regions. Our brand has never been stronger.”

“Captain D’s provides highly attractive and consistent unit economics for its franchise partners,” added Michael Fabian, a Sentinel partner. “This has fueled substantial growth in new franchise sales and openings over the last several years. We look forward to partnering with Phil and his talented team to help accelerate this growth in years ahead.”

Besides Captain D’s, since its inception, Sentinel has made eight other restaurant franchise investments, including Border Foods, a leading QSR franchisee in the Taco Bell system; Checkers/Rally’s, the largest franchisor and operator of dual drive-thru hamburger QSRs in the U.S.; Falcon Holdings, one of the largest QSR franchisees of Church’s Chicken restaurants; Fazoli’s Group, a franchisor and operator of Italian fast casual restaurants; Huddle House, a leading franchisor of family dining restaurants; Newk’s Eatery, a rapidly growing market leader in the fast casual restaurant segment; Southern California Pizza Company, the largest Pizza Hut QSR franchisee in the greater Los Angeles market; and TGI Friday’s, a global franchisor of casual dining bar and grill restaurants.

About Sentinel Capital Partners

Sentinel Capital Partners specializes in buying and building lower middle market companies in the United States and Canada in partnership with management. Sentinel targets aerospace and defense, business services, consumer, distribution, food and restaurants, franchising, healthcare, and industrial businesses. Sentinel invests in management buyouts, recapitalizations, corporate divestitures, and going-private transactions of established businesses with EBITDA of up to $40 million. Sentinel also invests in special situations, including balance sheet restructurings and operational turnarounds. For more information about Sentinel, visit www.sentinelpartners.com.

About Captain D’s

Headquartered in Nashville, Tennessee, Captain D’s has 530 restaurants in 21 states. Captain D’s is the nation’s leading fast casual seafood restaurant and was named the #1 seafood chain in the QSR 50, ranked by average unit volume. Founded in 1969, Captain D’s has been offering its customers high-quality seafood at reasonable prices in a welcoming atmosphere for more than 48 years. Captain D’s serves a wide variety of seafood that includes freshly prepared entrees and the company’s signature hand-battered fish, which is cooked to order. The restaurants also offer premium-quality, grilled items such as shrimp, and surf and turf, as well as hushpuppies, desserts and freshly brewed, Southern-style sweet tea, a Captain D’s favorite. For more information, please visit www.captainds.com.