Firm: Roark Capital Group
Fund: Roark Capital Partners III LP
Fund Target: $1.25 billion
Amount Raised: $462 million
Placement Agent: Lazard Freres & Co.
Roark Capital Group, an Atlanta-based buyout firm that specializes in franchise businesses such as restaurants, has raised $462 million for its latest mid-market vehicle, Roark Capital Partners III LP, according to a regulatory filing. The fund has a $1.25 billion target.
Investors in the firm’s latest fund include the University of Michigan Endowment Fund, which committed $20 million. Previous investors with the firm include the New York State Common Retirement Fund, Harvard Management Company and Princeton University.
According to its Web site, the firm was named after Howard Roark, the iconoclastic main character in Ayn Rand’s The Fountainhead. The firm description says its investment style and business philosophy are meant to emulate Roark’s rugged individualism.
Roark Capital’s most notable deal was its 2011 purchase of Arby’s Restaurants, the roast-beef sandwich chain, for $130 million plus the assumption of $190 million of debt. Arby’s was combined with the Wendy’s hamburger chain in 2008 after billionaire investor Nelson Peltz bought Wendy’s for $2.2 billion. The combination of the two chains created the nation’s third-largest fast food chain.
But things didn’t work out as well as planned, and Peltz again separated the newly merged chain, selling off Arby’s to Roark Capital.
Other restaurant chains Roark Capital has purchased include Carvel Ice Cream, Cinnabon, Wingstop and Auntie Anne’s Pretzels. The firm also owns Schlotzsky’s, Moe’s Southwest Grill and Il Fornaio Restaurants, a firm that in turn owns the Corner Bakery Café chain.
The firm also has invested in non-food franchise firms, notably Atkins Nutritionals, which Roark Capital bought from North Castle Partners in 2010 for $301 million.