Dive Brief:
- Boston Market has been acquired by Engage Brands, one of the Rohan Group of Companies, owned by real estate investor and restaurant operator Jingnesh “Jay” Pandya, according to a press release.
- Engage Brands will assume ownership of the brand, which was previously owned by Sun Capital Partners. Sun Capital bought the chain in 2007.
- Terms of the private transaction were not disclosed.
Dive Insight:
After a bit of a quiet period, this marks one of the largest restaurant acquisitions of the year. Acquisition activity appears to have slowed alongside the downturn in the industry following stay-at-home orders and dining room closures. TGI Friday’s sale to Allegro Merger Corp. was canceled in early April due to the new market conditions.
Boston Market’s latest deal could help bring life into the struggling brand, which closed 45 locations June and July 2019, following declines in revenue of over 1% in the fiscal year ending December 2018. After these closures, Boston Market’s store count is just over 400 units.
But Boston Market has been struggling beyond just recent years. At its peak, it had over 1,100 locations in the 1990s, and has since shrunk 60%. Boston Market was a victim of scaling too quickly, pressure from grocery stores now selling rotisserie chickens and a bankruptcy in 1998 that forced the chain to close nearly 700 locations, among other marketing and menu missteps, according to Mashed.
It also makes sense that previous owner Sun Capital would sell the troubled chain after its Restaurants Unlimited company declared bankruptcy July 2019. That 35-unit chain was then bought by Landry’s in September for $37 million. Sun Capital was rumored to put Boston Market up for sale as early as 2017, seeking $400 million after 10 years of ownership. This is a rather long time for a private equity company to wait, since these firms typically have hold times of five to seven years, especially for a chain that has seen declining revenue in recent years.
Fresh leadership could help the struggling chain find a path forward, while also providing fresh capital. Boston Market already brought on a new CEO in February with the appointment of Eric Wyatt, replacing Frances Allen, who had been with the company since 2018.
