Bain Capital acquires Fogo de Chão, a Brazilian steakhouse chain, for $1.1 billion.

Bain Capital acquires Fogo de Chão, a Brazilian steakhouse chain, for $1.1 billion.

Private Equity Firm Bain Capital Acquires Fogo de Chão for $1.1 Billion

Private equity firm Bain Capital has agreed to acquire Fogo de Chão, a popular Brazilian steakhouse chain, in a deal valued at approximately $1.1 billion, including debt. This acquisition represents a significant win for Bain Capital and follows Fogo de Chão’s previous privatization in 2018 by Rhone Capital, who is now set to make more than three times their initial investment.

Under Rhone Capital’s ownership, Fogo de Chão has experienced remarkable financial growth with an annual revenue increase of 15% since 2021. This improved performance prompted discussions of potentially relisting Fogo de Chão on stock exchanges. However, due to the U.S. IPO market collapsing early in 2021 and subsequent uncertainties, the decision was made to explore a sale instead.

Notably, private equity firm Bain Capital has a strong track record of successful investments within the restaurant industry, backing prominent names such as Burger King, Dunkin’ Brands Inc, Domino’s Pizza Inc, and Bloomin’ Brands Inc. This expertise in the sector positions Bain Capital well to guide Fogo de Chão’s future growth and success.

Fogo de Chão, originally founded in Southern Brazil in 1979, now boasts a presence in 76 locations worldwide. With its emphasis on high-quality Brazilian-style BBQ, the restaurant chain has successfully carved out a niche within the competitive dining market.

The acquisition of Fogo de Chão by Bain Capital comes at a time of increased dealmaking within the restaurant industry. Subway, the popular sandwich chain, is also exploring a potential sale that could be finalized in the coming weeks, while Benihana Inc has been working with advisers to facilitate a sale of their own.

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In terms of financing the acquisition, Bain Capital arranged debt financing through Deutsche Bank, who is also serving as the firm’s financial advisor. On the legal front, Kirkland & Ellis provided legal counsel to Bain Capital. Fogo de Chão and Rhône Capital are advised by Morgan Stanley & Co LLC, with legal counsel from Sullivan & Cromwell.

This exciting acquisition signifies the continued confidence in the restaurant industry’s potential for growth and success. As private equity firms, like Bain Capital, recognize the strong financial performance and market presence of established and well-managed restaurant chains, we can expect to see further investment and deals within this sector in the future.

This story has been refiled to correct a syntax error in paragraph 11.

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