K-MAC, Taco Bell franchisee, gets new PE owner: Lee Equity

Lee Equity Partners on Tuesday confirmed that it was the buyer of K-MAC Holdings, the Fort Smith, Arkansas, Taco Bell franchisee and restaurant operator.

Terms of the deal are unclear. Employing more than 7,500, K-MAC operates 294 restaurants, including 271 Taco Bell, 17 KFC and six Golden Corral restaurants, spread across nine states.

K-MAC will continue to be led by President and CEO Sam Fiori and COO Tina Reagan, a statement said.

In December, Brentwood Associates said it had sold K-MAC. It didn’t disclose the buyer. Arlon Group also sold its K-MAC stake as well, a statement said.

An affiliated fund of Lee Equity closed on K-MAC last month, executives said. The firm used Lee Equity Opportunities Fund to invest in the company, they said.

Lee Equity is the third PE owner of K-MAC. Brentwood acquired K-MAC in 2011 from Olympus Partners. That deal was valued at $290 million, Buyouts has reported.

Thomas H. Lee, the noted dealmaker, founded Lee Equity in 2006, after leaving Thomas H Lee Partners.

Lee Equity, New York, is a middle-market PE firm that invests in sectors including business services, consumer and retail, distribution and logistics, financial services, healthcare services and media. The firm typically invests from $50 million to $150 million equity per deal, its website said.

In November, WellCare Health Plans said it would buy smaller rival Universal American, a Lee Equity portfolio company, for about $600 million.

Lee Equity raised about $315 million for its second fund, Buyouts reported in March. The firm’s first pool closed on about $1.1 billion in 2008.

Brentwood, Los Angeles, is a consumer-focused PE firm. Brentwood closed its fifth fund in 2014 at $688 million.

Executives for Brentwood declined comment.

A Taco Bell restaurant is pictured in Paramus, New Jersey, on July 8, 2015. Photo courtesy Reuters/Eduardo Munoz