Brentwood Associates has bought a majority stake in Z Gallerie, a 50-store furniture retailer that got its start as a poster shop, according to peHUB affiliate Buyouts magazine, which cited a source.
Buyouts was unable to learn the size of the investment, which was made by Brentwood Associates Private Equity V LP, a $260 million fund raised last year. Z Gallerie’s founders will retain a significant stake in the company, bought in a non-auction process, according to the source.
A Brentwood official said the firm had no comment.
(Update: Brentwood issued a press release this morning announcing the deal. The release noted that “Z Gallerie was advised by BMO Capital Markets, and its legal counsel was Skadden, Arps, Slate, Meagher & Flom LLP. Brentwood was represented by Greenberg Traurig LLP on the transaction and Kirkland & Ellis LLP on the debt financing. KKR’s credit business and KeyBanc Capital Markets Inc. provided debt financing supporting the acquisition.”)
A specialist in the consumer sector, Brentwood typically buys majority stakes in companies with $5 million to $40 million in EBITDA, with a sweet spot of $15 million to $30 million in EBITDA. The Z Gallerie transaction would fall within the latter range, the source said.
Negotiations between the owners of Z Gallerie and Brentwood heated up in the past year, but Brentwood firm had been in touch with the retailer as early as three years ago, according to the source.
Z Gallerie, a 35-year-old family business based in Gardena, Calif., was formed by three siblings, Joe Zeiden, Carole Malfatti and Mike Zeiden, who opened a poster shop and grew from there, according to the company’s website. Overall, the home decorating sector has been getting a lift from moderate U.S. economic growth and a real estate recovery in many parts of the country.
Photo courtesy of Z Gallerie