Introduction

In a landmark deal announced on Tuesday, Blackstone has signed an agreement to acquire Jersey Mike's Subs, the popular sandwich chain, for approximately $8 billion, including debt. This acquisition highlights the growing trend of private equity firms targeting franchise operators in the fast-casual restaurant segment.

Deal Confirmation

The confirmation of the deal follows a report by Reuters indicating that Blackstone was close to finalizing the acquisition. Expected to wrap up by early 2025, this transaction signifies not only the robust growth of Jersey Mike's but also the financial firm's eagerness to invest in the booming food franchise sector.

History of Jersey Mike's Subs

Founded in 1956 by Mike Flood as Mike's Subs in Point Pleasant, NJ, Jersey Mike's was taken over by Peter Cancro in 1975, who began franchising the outlet in 1987. Over the years, the chain has expanded rapidly and now boasts more than 3,000 locations across the United States.

Comments from Peter Cancro

Cancro expressed optimism about the future of Jersey Mike's under Blackstone's stewardship. “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,” he noted, emphasizing his commitment to remain integral to the company’s leadership while holding a significant equity stake.

Blackstone's Investment Strategy

Blackstone's appetite for expanding its franchise portfolio has been notable this year. The firm has previously made substantial investments in the food and beverage sector, including funding for 7 Brew Coffee, a drive-thru coffee concept, and acquiring Tropical Smoothie Cafe from Levine Leichtman Capital Partners.

Statements from Blackstone

Peter Wallace, Blackstone's senior managing director, highlighted the firm’s strategy, stating, "Blackstone has deep experience helping accelerate the expansion of high-growth franchise businesses and this area is one of our highest-conviction investment themes."

Broader Trends in the Industry

This acquisition not only strengthens Blackstone's presence in the food industry but is also indicative of a broader trend where private equity firms are increasingly exploring opportunities within the franchise market, particularly as consumer preferences shift toward fast-casual dining experiences.

Conclusion

As the landscape of restaurant franchises continues to evolve, industry experts are closely watching how Jersey Mike's, backed by Blackstone's investing prowess, will adapt and expand in the competitive fast-food sector.