Sentinel, TriArtisan putting 25 pct equity into $890 mln buy of TGI Fridays

Today’s interesting equity investment comes courtesy of Sentinel Capital and TriArtisan Capital Partners.

The two firms are buying TGI Fridays from Carlson, the hospitality and travel company. The deal, which includes about $670 million in debt, calls for Sentinel and TriArtisan to invest $200 million equity, Moody’s Investors Service said in a note on June 11. Assuming the firms have equal stakes, that’s about $100 million each. TGI Fridays’ current owners also are providing $20 million of preferred equity, Moody’s said.

Sentinel’s investment comes from its fifth fund, which closed last year at $1.3 billion.

TGI Fridays owns, operates and franchises restaurants in the casual dining space. TGI Fridays has more than 510 restaurants in the United States and 400 internationally, Moody’s said. The company produces roughly $1.13 billion in annual revenues, Moody’s said.

The $220 million equity is 25 percent of TGI Fridays’ $870 million deal value. That is lower than the typical 28 to 30 percent equity investment usually provided by PE firms (if you take out the $20 million provided by the sellers, the $200 million provided by Sentinel and TriArtisan is less than 24 percent). But it’s not the lowest we’ve seen recently.

That honor goes to Bain Capital and Golden Gate Capital, which led a group last year to buy BMC Software. The investor group only contributed $1.25 billion equity to the BMC buyout, or 14 percent of the $8.7 billion deal, peHUB has reported.

Executives at Sentinel and TriArtisan could not be reached for comment.

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