BY Fraser Tennant
In a deal that underscores private equity’s (PE’s) increasing interest in franchise operators, alternative asset manager Blackstone is to acquire a majority ownership of sandwich chain Jersey Mike’s Subs for $8bn, including debt.
The acquisition – the financial terms of which have not been disclosed – is intended to help enable Jersey Mike’s accelerate its expansion across and beyond the US market, as well as aid its ongoing technological investments.
Jersey Mike’s is the latest in Blackstone’s investment in food franchises in 2024. In February, it announced an equity investment in 7 Brew Coffee, while April saw an agreement to buy Tropical Smoothie Cafe from PE firm Levine Leichtman Capital Partners.
“Jersey Mike’s has grown for more than half a century by maintaining an unrelenting focus on quality – consistently building on its loyal customer base as it has scaled nationwide,” said Peter Wallace, a senior managing director at Blackstone. “Blackstone has deep experience helping accelerate the expansion of high-growth franchise businesses and this area is one of our highest-conviction investment themes.”
Blackstone’s investment ends Jersey Mike’s almost seven decades as a privately owned business, in which time it has grown to become the second-largest sandwich chain in the US, behind Subway. Peter Cancro, who has been with Jersey Mike’s since 1971 and owned it since 1975, will remain chief executive and maintain a “significant” stake, according to Blackstone.
“We believe we are still in the early innings of Jersey Mike’s growth story and that Blackstone is the right partner to help us reach even greater heights,” said Mr Cancro. “Blackstone has helped drive the success of some of the most iconic franchise businesses globally and we look forward to working with them to help make significant new investments going forward.”
The transaction is expected to be completed in early 2025 subject to the satisfaction of certain closing conditions, including applicable regulatory approvals.
Mr Wallace concluded: “Our capital and resources will help support key investments in growth and technology for the benefit of Jersey Mike’s customers and exceptional franchisees.”
News: Blackstone strikes $8 billion deal for sandwich chain Jersey Mike’s Subs