- Why is this important: Serruya FO of Canada continues to build a major portfolio of brands in the U.S. quick-service restaurant industry.
Family office Serruya Private Equity partnered with Lion Capital in acquiring the owner of Great American Cookies, Round Table Pizza and other retail food brands.
Last month, Lion and SPE acquired Global Franchise Group from Levine Leichtman Capital Partners.
The Los Angeles PE firm announced the sale but did not disclose the terms or buyers.
The mystery was solved in part by GFG, which on its website is now identified as an affiliate of Lion and SPE. A trade journal, Nation’s Restaurant News, also broke the news.
Bloomberg earlier this year reported that LLCP was working with advisers on a sale that could value GFG at more than $700 million.
Based in Atlanta, GFG was formed in 2010 with LLCP’s acquisition of the franchise assets of NexCen Brands, reportedly for $112.5 million.
Led by former NexCen executive Chris Dull, the company has since added to its portfolio of brands in the U.S. quick-service restaurant industry.
Along with Great American and Round Table, GFG today owns Marble Slab Creamery, Pretzelmaker, MaggieMoo’s Ice Cream & Treatery and Hot Dog on a Stick.
It oversees about 1,500 franchised and corporate locations, mostly in North America, Latin America and Asia.
GFG is right in the wheelhouse of SPE, which invests on behalf of a Canadian family that made its name and fortune by building and buying food ventures.
Brothers Michael and Aaron Serruya, both SPE managing directors, began their careers in the 1980s as the founders of frozen yogurt retailer Yogen Früz. A third brother and managing director, Simon Serruya, also partners in the business.
Starting off with a single Toronto outlet, Yogen Früz expanded its operations over 30-plus years to more than 1,400 stores in 47 countries. Once listed, it now resides in SPE’s portfolio.
Other major investments have included Kahala Brands, a restaurant franchise platform. Acquired by the family office and Delavaco Group in 2013, it was sold three years later to MTY Food Group for about $310 million.
SPE also backed protein and organic food company Blue Goose and coffee chain Second Cup, which in 2016 raised an C$8 million loan that was later converted into equity.
Another portfolio investment, Famoso Neapolitan Pizzeria, was sold earlier this year to FDF Restaurant Brandz.
Pivot to cannabis
SPE continues to invest in retail food, as well as other consumer sectors and real estate. It also recently turned its attention to the burgeoning cannabis industry.
Partly in anticipation of Canada’s legalization of recreational marijuana in October, SPE invested in multiple producers. They include Aphria, currently one of the country’s largest cannabis businesses.
In another deal closed last month, the family office invested C$10 million in Aleafia Health to support its entry into the adult-use space and launch retail operations.
SPE also invests in U.S. cannabis companies, including Aphria affiliate Liberty Health Sciences.
Activity south of the border appeared to intensify in 2018, with the family office leading or participating in the financings of Bud.com, Plus Products and Verano Holdings, among others.
Direct deal focus
SPE is one of a number of Canadian family offices that are gaining considerable profile as direct investors.
Claridge, the family office of Stephen Bronfman, a member of Canada’s storied Bronfman clan, earlier in 2018 signaled an appetite for expanding investments in the North American food and beverage industry.
Last year, Claridge sold frozen-food company Les Plats du Chef to C.H. Guenther & Son.
Walter Group of Cos has also stepped up its game through its PE arm. Walter Capital Partners closed several investments this year, including school photo provider Edge Imaging and carrying-case products maker Plasticase.
Additionally, Walter Group unveiled a new PE platform in June to invest in North America’s asset-management sector.
And Tricor Pacific Capital, formerly a mid-market PE firm, relaunched in October as a family office. It will invest in a range of sectors, among them light manufacturing, business and consumer services, and specialty retail.