UPDATE, Aug. 5, 2019: Perkins & Marie Callender's has entered into an asset purchase agreement with Perkins Group, a newly formed entity, for the sale of its Perkins' business and its Foxtail bakery business, according to a press release. The company voluntarily entered Chapter 11 bankruptcy. Marie Callender's has yet to be sold, but is in discussions with potential buyers and investors. Additionally, as part of its restructuring, the company closed 10 Perkins and 19 Marie Callender's locations. All remaining restaurants are expected to remain open and operational.

Dive Brief:

• Perkins & Marie Callender's Inc., which owns Perkins Restaurants & Bakery and Marie Callender's, is in the process of being sold and may need to declare bankruptcy as part of that sale, according to Nation’s Restaurant News.
• A bankruptcy would clear the acquiring company of certain existing liabilities and is not meant to be seen as a result of financial performance, spokesperson Vivian Brooks told Nation's Restaurant News.
• Wayzata Investment Partners manages private investment funds that are majority owners of both brands. A potential buyer has not been identified.

Dive Insight:

With many private equity companies reaching the end of their seven- to eight-year hold times, it is no surprise that several restaurant brands have been bought and sold during recent months. Several public companies struggling to post significant returns have also come under additional scrutiny by investors to consider a sale.

For Perkins & Marie Callender's, the reason for a sale appears to be the former. In 2011, after the company emerged from bankruptcy, it gained three members of its board from Wayzata and its current majority stakeholders that have now owned the brand for eight years.

While both brands have grown same-store sales in the single-digits year-to-date, according to Nation's Restaurant News, casual dining in general has been facing sluggish sales and is ripe for transformation under new ownership. And plenty of brands have undergone acquisitions. P.F. Chang's was sold earlier this year to a new private equity company and Del Frisco's is also reportedly nearing a sale. Last year, Macaroni Grill acquired Sullivan's Steakhouse from Del Frisco's in 2018, while Del Frisco's bought Barteca Restaurant Group.

Private equity firms have been on the hunt for restaurant brands while other restaurant companies, such as Darden and Macaroni Grill, have said they have been considering acquisitions. Many restaurant brands have reached saturation in the highly competitive restaurant industry and have turned to growing internationally or through acquisitions. It will be interesting to see who ends up buying Perkins & Marie Callender's Inc. especially since a buyer could benefit from the fact that Marie Callender's is also a well-known brand sold in grocery stores.