Brazil Fast Food Corp. (fka BOBS)

[NumberOne]

From Jennifer Rossa..

In the restaurant industry, exits via any path other than bankruptcy have been rare of late. But there were two this week - both via sales to other buyout firms, and both generating seemingly respectable returns.

Madison Dearborn Partners LLC and a unit of Bahrain International Bank agreed to sell their 6.6 million common shares in publicly traded Carrols Restaurant Group Inc., the largest Burger King franchisee in the U.S., to Jefferies Capital Partners. The price wasn’t disclosed, but at Carrol’s current stock price of around $6.80, that would generate proceeds of roughly $44.9 million for the two firms.

They’ve previously returned around $200 million in proceeds from dividend recapitalizations and the sale of stock in the company, according to calculations based on regulatory filings. It seems like a decent enough cash-on-cash return, overall: Madison Dearborn paid roughly $61 million to buy its stake from BIB in 1997.

Meanwhile, Arcapita Inc. sold fast food chain Church’s Chicken for between $300 million and $390 million to fellow buyout shop Friedman Fleischer & Lowe LLC. It netted a two times cash-on-cash return, in part thanks to a sale-leaseback transaction on the chain’s real estate.

While this could be evidence that the sky isn’t falling in on the restaurant industry, Arcapita says doing deals remains tough. “Right now the only people looking at the consumer sector are ones that have gotten really good consumer experience,” said Arcapita Executive Director Stockton Croft.

http://blogs.wsj.com/privateequity/2009/06/19/maybe-the-sky-isnt-falling-in-on-restaurants-chicken-little/