Jersey Mike’s now has enough backing to further expand well beyond its roots on the Eastern Seaboard.
The rapidly expanding sandwich chain is being acquired by private equity firm Blackstone for approximately $8 billion, according to the Associated Press. Specifically, private equity funds managed by Blackstone will be used to acquire majority ownership of Jersey Mike’s.
The 68-year-old sandwich chain “really is a darling,” Dan Rowe, the CEO of Fransmart, told The Food Institute. “It’s just massively huge, with thousands of units with very high same-store sales growth.”
Rowe views Jersey Mike’s multibillion-dollar deal as “a great sign” for the restaurant industry.
Jersey Mike’s and Blackstone said in a prepared statement that their deal – expected to close in early 2025 – is “intended to help enable Jersey Mike’s to accelerate its expansion across and beyond the U.S. market.”
Peter Cancro – Jersey Mike’s leader since 1975 – will continue to lead the chain’s business and maintain a significant equity stake.
“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,” Cancro said in a statement.
Jersey Mike’s has expanded rapidly over the past decade, more than tripling its locations from 857 stores in 2014 to more than 2,800 this year, the AP reported. According to Technomic, the sandwich chain posted sales of $3.3 billion in 2023, up 25% from the year prior.
Blackstone has been equally aggressive lately and acquired Tropical Smoothie Café earlier this year.
Rowe feels Tuesday’s headline-grabbing deal could be just the start of an uptick in M&A within the restaurant industry. He pointed to the strong recent stock performances of chains like Sweetgreen and Cava as one key reason.
“You’re going to see way more M&A. Headwinds have abated a bit. It’s a supply-and-demand correction,” Rowe told FI. “And it very much feels like the last two, three years – as tough as it’s been – it feels like the cycle has bottomed out.
“Everything goes in cycles. Now you’re starting to see real examples of people doing well at a time when stocks are flying, and banks want to throw money at people,” Rowe added. “Banks are lending money.
“So, you’re going to see more M&A. I think we’re gonna go on a good run. The next few years should be really good.”
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