(Reuters) – Privately held Papa Murphy’s, known for its take ‘n’ bake pizzas, said it was being bought by private equity firm Lee Equity Partners for an undisclosed amount.
Lee Equity bought Papa Murphy’s from another private-equity firm, Charlesbank Capital Partners LLC, which owned a majority stake in Vancouver, Washington-based pizza chain. Papa Murphy’s, which operates nearly 1,200 franchised and corporate-owned locations in 35 U.S. states and in Canada, said it expects the deal to close in the second quarter of 2010.
Terms of the deal were not disclosed.
“It’s a consumer (food) staple, it is less sensitive to economic cycles and it is really the leader in the ‘take-and-bake’ pizza category,” Lee Equity partner Yoo Jin Kim said.
Take and bake means everything’s made fresh in the store; the buyer can take it home and cook at their own convenience.
“There’s a tremendous amount of store potential; they only cover 40 percent to 45 percent of the U.S. population right now,” Kim said.
He added there are several parts of the country Papa Murphy’s hasn’t penetrated at all.
Papa Murphy’s said it expects the deal to help it seek new franchise owners and open locations, primarily in southwestern and southeastern United States.
North Point Advisors and Wells Fargo Securities served as consultants to Charlesbank and Papa Murphy’s on the transaction.
Recent deals involving private equity firms indicate a growing interest in the quick service restaurants (QSR) sector.
In February, CKE Restaurants Inc (CKR.N), owner of the Hardee’s and Carl’s Jr. hamburger chains, agreed to be bought by another PE firm, Thomas H. Lee Partners [THL.UL], for $619 million cash.
(Reporting by Shradhha Sharma in Bangalore and Megan Davies in New York)