Bojangles Refinancing Banks on Old Connections

Need to refinance portfolio company debt? Well, it might help if your firm was founded by the former CEO and CFO of a bank that’s still in business.

Yesterday, Falfurrias Capital Partners announced that it has secured a $70 million refinancing for quick-serve restaurant chain Bojangles (it of the famed chicken & biscuits). The refi was co-led by Bank of America and Wells Fargo, with BB&T and Regions Bank also participating. Not coincidentally, Falfurrias was launched in 2006 by ex BoA bigs Hugh McColl and Marc Oken.

Oken told me yesterday that the relationship obviously helped facilitate the deal, but that it ultimately came down to the company’s growth. Not only did it have 7% sales growth over the first six months of 2009 (compared to first six of 2008), but also had 17% EBITDA growth over the same period.

He also said that the refinancing made sense to do now for two main reasons: (1) Rates are lower now than when the original buyout closed two years ago; (2) “We left a lot of the existing debt in place to get the deal done quickly… There were some prepayment penalties that kind of went away, or lessened, with the passage of time.”