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Sun Capital to make 8x its money on Captain D’s Seafood sale

Sun Capital Partners, which is out marketing for its sixth fund, stands to make an impressive 8x its money with the sale of Captain D’s Seafood Restaurant, a source familiar with the transaction said.

On Tuesday, Centre Partners, a middle-market PE firm that has invested in Bumble Bee Foods and Bellisio Foods, closed its acquisition of Captain D’s. Financial terms were not disclosed.

Nashville-based Captain D’s operates 521 seafood-themed, fast casual restaurants in 26 states. Company management will own a significant stake in the business, Centre Partners said in a statement. Captain D’s does not disclose financial information, but the company had $235 million in revenue in 2009, Bloomberg News has reported.

Sun Capital acquired Captain D’s in 2010 from Charlesbank Capital Partners. The investment came from Sun’s fifth fund, which collected $6 billion in 2007. Sun Capital Partners V LP, after suffering some early losses, was reduced to $5 billion to accommodate LPs, peHUB has reported.

The sale of Captain D’s is expected to generate an IRR of 100 percent, the source said.

The strong return comes as Sun is out marketing for its sixth pool, which has a $3 billion target. Sun began fundraising in December 2012 and hoped to wrap up marketing that month. The fundraising is taking longer than Sun expected, and the buyout shop will be approaching $2 billion by the end of the year. Sun expects to finish up fundraising in 2014, peHUB reported in November.

Fund V has produced other “screaming homeruns,” one placement agent said. In 2009, Sun sold Timothy’s Coffee to Green Mountain and made 5.25x its money. Early in 2012, Sun sold Raybestos Powertrain to Monomoy Capital, making a 110x return on its investment, peHUB has reported.

Sun Capital also successfully took Vince Holding, a high-end sportswear brand, public in November. Shares of Vince jumped about 50 percent on their first day of trade. The strong IPO helped Sun Capital put its once-challenged investment in Kellwood Holding, a Fund V investment and owner of Vince, in the black.

Sun declined comment.

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