Key Takeaways
- • Bain Capital Private Equity has agreed to acquire Fogo de Chão from Rhône Capital for approximately $1.1 billion, including debt, with closing expected in September 2023.
- • Rhône Capital's five-year ownership generated substantial value creation, acquiring the Brazilian steakhouse chain for $560 million in 2018 and achieving nearly 2x return on the investment.
- • Fogo de Chão operates 76 locations globally and has maintained 15% year-over-year growth for three consecutive years under Rhône's ownership, with individual units generating approximately $7 million in annual revenue and 50% three-year average return on invested capital.
- • Current CEO Barry McGowan and existing management will remain in place to lead the company's continued expansion, with Bain Capital positioned to leverage its restaurant sector experience to accelerate growth initiatives.
- • The transaction reflects strong investor confidence in experiential dining concepts and validates Fogo de Chão's differentiated churrasco-based model and Brazilian heritage as a global category leader.
Summary
Bain Capital Private Equity has entered into a definitive agreement to acquire Fogo de Chão from Rhône Capital for $1.1 billion, including debt, marking a significant transition for the Brazilian steakhouse chain. The transaction, announced on August 15, 2023, is expected to close in September 2023. Rhône Capital, which acquired the company in 2018 for $560 million, achieved approximately a 2x multiple on its investment over the five-year holding period, demonstrating substantial value creation during its ownership tenure.
Fogo de Chão currently operates 76 locations worldwide and has achieved remarkable operational momentum under Rhône's stewardship. The company has maintained 15% annual growth for three consecutive years and demonstrated strong unit economics, with each of its approximately 8,500-square-foot locations generating roughly $7 million in annual revenue. Individual units have delivered a three-year average return on invested capital of 50% by their third year of operation, indicating a highly profitable business model built on its differentiated churrasco dining experience.
The acquisition underscores Bain Capital's strategic focus on restaurant and hospitality investments. CEO Barry McGowan, who will continue leading the company under new ownership, emphasized that "Bain Capital shares our vision" and noted the firm's "extensive experience investing in and supporting the global growth of restaurant businesses." The current management team will remain in place to execute growth plans, suggesting operational continuity despite the ownership change. Bain Capital has identified significant upside potential in Fogo de Chão's expansion strategy, particularly given the company's position as a global leader in experiential dining.
Founded in Southern Brazil in 1979, Fogo de Chão has leveraged its centuries-old churrasco cooking technique to build a differentiated global brand. The transaction reflects sustained investor appetite for premium casual-dining concepts with strong unit economics and clear expansion runways, positioning Bain Capital to accelerate the company's growth trajectory across domestic and international markets.
Fogo de Chão currently operates 76 locations worldwide and has achieved remarkable operational momentum under Rhône's stewardship. The company has maintained 15% annual growth for three consecutive years and demonstrated strong unit economics, with each of its approximately 8,500-square-foot locations generating roughly $7 million in annual revenue. Individual units have delivered a three-year average return on invested capital of 50% by their third year of operation, indicating a highly profitable business model built on its differentiated churrasco dining experience.
The acquisition underscores Bain Capital's strategic focus on restaurant and hospitality investments. CEO Barry McGowan, who will continue leading the company under new ownership, emphasized that "Bain Capital shares our vision" and noted the firm's "extensive experience investing in and supporting the global growth of restaurant businesses." The current management team will remain in place to execute growth plans, suggesting operational continuity despite the ownership change. Bain Capital has identified significant upside potential in Fogo de Chão's expansion strategy, particularly given the company's position as a global leader in experiential dining.
Founded in Southern Brazil in 1979, Fogo de Chão has leveraged its centuries-old churrasco cooking technique to build a differentiated global brand. The transaction reflects sustained investor appetite for premium casual-dining concepts with strong unit economics and clear expansion runways, positioning Bain Capital to accelerate the company's growth trajectory across domestic and international markets.
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