San Diego-based Garden Fresh Restaurants is in new hands, but don’t look for changes in the management or operation at the company’s local Souplantation buffet-style eateries.
“We don’t anticipate any changes in terms of the organization as it stands,” said Anthony Polazzi, vice president at Sun Capital Partners, the Boca Raton, Fla.-based private investment firm that paid about $198 million for the company. Garden Fresh has 97 Souplantation and Sweet Tomatoes restaurants in 15 states, including nine in San Diego.
Polazzi said that the only thing that will change is a commitment to growing the company.
“The company has done a great job over the last few years improving its execution at its existing store base but we felt there was a lot of growth opportunities to expand,” he said.
During the next year, the plan is to open five new restaurants and about five to 10 each year after that, Polazzi said.
While San Diego is certain to be included in the mix of new units, no firm locations have been selected. The idea is to expand in the company’s core markets of Southern California, Arizona and Florida, Polazzi said.
Garden Fresh’s sale was arranged fairly quickly once the best potential buyer was identified, said Bob Bergmann, managing director for Centre Partners, the New York-based private equity fund that had the controlling stake in the company.
Centre acquired Garden Fresh in March 2004 along with Fairmont Capital, an Orange County-based investment firm, Northwestern Mutual Insurance Co., and the restaurant chain’s management team. The price paid for the former publicly traded Garden Fresh was about $140 million, including $16.35 per share, and some $40 million in property acquisitions, Bergmann said.
“It was a very successful investment for all the equity holders,” he said. “We achieved a five-year return on our expectations in an 18-month period.”
Centre Partners is the same equity firm that partnered with the management of Bumble Bee Seafood to purchase that company from ConAgra Foods of Omaha for an undisclosed price in 2003. Centre then sold Bumble Bee last year to the management team, again for a price it would not disclose.
Bergmann said Centre didn’t overhaul Garden Fresh, but made some changes that apparently worked.
Those included investing more in the food, introducing a few new products, and marketing the chain better.
“We helped Garden Fresh gain a new focus on its menu development and marketing,” said Michael Gibbons, Fairmont Capital’s president. “The strategy has worked wonderfully with comp store sales running at about 8 percent (higher).”
For the fiscal year ended Sept. 30, Garden Fresh had revenues of about $245 million, up from about $230 million in the previous fiscal year, according to Michael Mack, the company’s chief executive. The Rancho Bernardo headquarters has 70 employees.
Sun Capital has been on a buying binge of sorts this year. Through the first half, it has acquired eight companies and boosted its ownership in six other existing investments.
Among the add-on investments was Bruegger’s Bagels, a Vermont-based chain of 252 bagel bakeries and cafes in 15 states.