Dive Brief:

• An affiliate of private equity firm Peak Rock Capital completed an acquisition of Shipley Franchise Company and Shipley Do-nut Flour & Supply Co., according to a Wednesday press release. Terms of the transaction were not disclosed. This acquisition is Peak Rock's 12th investment in the food, beverage and consumer industry over the past few years. 
• Shipley Do-Nuts, a family-owned business with over 300 locations across nine states, offers doughnuts, kolaches and beverages. Alongside the acquisition, the company's president Lawrence Shipley III has retired.
• This latest deal follows is part of an uptick of acquisition activity recently, and follows behind Goldman Sachs' purchase of a significant stake in Zaxby's, Rohan Group's acquisition of Corner Bakery and Levine Leichtman Capital Partners buying Tropical Smoothie Cafe.

Dive Insight:

Concepts with heavy off-premise traffic that continued to deliver strong unit economics during the pandemic are increasingly gaining interest among restaurant holding companies and private equity firms alike. And Shipley Do-Nuts is no different. 

The company offers drive-thus across its locations, most of which are in Texas. Despite the pandemic, the doughnut chain continued to generate interest among franchisees with new shops opening last year in new markets such as Jacksonville, Florida and a planned opening in Baton Rouge, Louisiana  in January. According to Technomic,  Shipley increased system sales by 3.5% to $94.8 million in 2019, Restaurant Business reports. During the last five years, the company had about 2.7% system sales growth, according to Restaurant Business.

Under new ownership, the chain could expand further with new franchisees. Peak Rock's CEO Anthony DiSimone said in the press release the company seeks consumer-oriented platforms and acquisitions that it believes could benefit from the private equity firm's ability to drive growth and improve performance. The company's portfolio includes Halo Foods, Turkey Hill, Pretzels Inc and Louisiana Fish Fry. 

"Shipley is deeply committed to continue providing existing franchisee partners with opportunities to grow their business and will actively seek relationships with new partners who are interested in being a part of our growing concept," Robert Strauss, managing director of Peak Rock, said in the press release.

While private equity firms continue to express interest in the restaurant space, this latest acquisition is the second transaction to be completed in the early days of 2021. Capriotti's Sandwich Shop bought Wing Zone earlier this week. Analysts expect 2021 to be particularly active as many deals that were stalled last year due to the pandemic will likely be completed this year.