Private Equity Firm Had Its Fill of Restaurant Franchisee, reports the LABJ

Portfolio Company News: Pacific Island Restaurants

West L.A. private equity firm Brentwood Associates usually holds on to its investments for six years or so, reported the Los Angeles Business Journal. But it was nearly eight years before Brentwood tried to sell Pacific Island Restaurants Inc. – the sole franchisee of Pizza Hut and Tacho Bell in Hawaii, Guam and Saipan.

A deal closed last month. The longer term speaks to how successful an investment the franchisee proved to be, saidRahul Aggarwal, managing director at Brentwood. “We didn’t entertain any opportunities to sell the business until last year,” he said. “The company continued to perform throughout the recession. There wasn’t any real impetus to sell any sooner.”

The restaurant group’s sale to Nimes Capital in Century City, a private equity firm controlled by the Nazarian family, shows that franchised restaurants remain attractive targets for private equity.

“These make great private equity investments,” Aggarwal said. “The fast-food industry has a lot of brands that have performed through several recessions and that have consistent revenue growth. When you’re looking for deals, you’re looking for those kinds of characteristics.”