H.I.G.-backed Hooters of America seeks a buyer: sources

  • Hooters founded by six friends in 1983
  • H.I.G., KarpReilly, Chanticleer acquired Hooters in 2011
  • Hooters’ owners pulled 2015 sales process

Hooters of America again has gone up for sale, nearly three years after calling off its last process, three sources said.

Piper Jaffray is advising on the auction, two of the people said. It’s unclear how much Hooters is seeking.

Hooters was last up for sale in 2015; Piper Jaffray also advised at that time, Buyouts reported.

In 2015, the restaurant chain was producing Ebitda north of $65 million, Buyouts reported. It was seeking bids of 7x to 7.5x, the story said.

One GP noted that Hooters is a tough brand for private equity. “Not a lot of LPs want to be invested in a restaurant with scantily clad waitresses,” the source said.

Hooters is considered the original “breastaurant.” Founded by six friends in 1983, the chain is known for featuring waitresses wearing skimpy orange shorts and tight white T-shirts.

A consortium including H.I.G. Capital, KarpReilly and Chanticleer Holdings acquired the company in 2011. H.I.G. has a majority stake, sources said.

Hooters franchises and operates more than 420 restaurants in 29 countries. The company’s 2017 global revenue fell 0.9 percent to $996.5 million, according to Technomic.

Chanticleer, which owns and operates fast casual and full service restaurant brands like Little Big Burger and Just Fresh, owns a minority of Hooters.

In March, Chanticleer agreed to sell its Hooters’ Nottingham and Tacoma locations, according to a May 2018 SEC filing. The firm operates eight full-service restaurants in the U.S., South Africa and the U.K.

In the past several years, Hooters has been trying to appeal to a broader array of tastes. The restaurant chain sells chicken wings, sandwiches and tacos as well as five different types of salads.

It is also offering a lighter-choice menu such as steamed shrimp (250 calories), snow crab legs (157) and wise choice fish tacos (512).

Hooters is also the latest restaurant chain to go up for sale. Earlier this month, Centerbridge Partners said it had hired B of A Merrill Lynch and Barclays to explore a potential sale of P.F. Chang’s Bistro.

Centerbridge acquired P.F. Chang’s in 2012 for $1.1 billion. The firm recently completed the operational split of P.F. Chang’s Bistro and Pei Wei Asian Diner into two independently operated businesses.

Hooters, H.I.G., Piper Jaffray and KarpReilly could not be reached for comment. Chanticleer declined comment.

Action Item: Contact Hooters CEO Terrance Marks at +1 770-951-2040