Blackstone Nears Deal to Acquire Jersey Mike's Subs for $2 Billion

Deal Valued at Over $2 Billion

Blackstone Group Inc. is nearing a deal to acquire Jersey Mike's Subs, a popular sandwich chain, for over $2 billion, including debt, according to people familiar with the matter. The deal, which could be announced as early as this week, would be one of the largest leveraged buyouts of a restaurant chain in recent years.

Jersey Mike's Rapid Expansion

Jersey Mike's has experienced rapid expansion in recent years, with over 2,000 locations across the United States. The chain is known for its fresh-sliced meats and cheeses, as well as its commitment to customer service. Jersey Mike's has been particularly successful in suburban and rural areas, where it has often filled a void for fast-casual dining options.

Deal Highlights

The deal highlights the continued appetite of private equity firms for restaurant chains, which have been seen as relatively recession-resistant investments. Blackstone has been particularly active in the restaurant sector, having acquired companies such as Ruth's Chris Steak House and Red Lobster in recent years. The firm is betting that Jersey Mike's can continue to grow its footprint and increase its market share.

Current Jersey Mike's Ownership

Jersey Mike's is currently owned by its founders, Peter Cancro and Jeff Weinstock, as well as Vestar Capital Partners, a private equity firm. Cancro and Weinstock are expected to remain involved with the company after the deal is complete.

Financial Implications

The deal is expected to be financed with a combination of debt and equity. Blackstone is expected to provide the majority of the financing, while Vestar Capital Partners is expected to roll over some of its equity into the new entity. The deal is expected to close in the coming months, pending regulatory approval.